| malcolmb14 |
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Gold User, Member, Platinum User, TeleChart
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| Tuesday, May 17, 2005 |
| Sunday, April 1, 2007 8:40:22 PM |
221
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Back in August of 2006 I stumbled across a very interesting article in the August edition of Stocks and Commodities magazine. It was titled ' Beyond the 70 and 30 zones'. To summarize the article you use the value of 50 in the rsi as a pivot point, In other words is a stock comes up thru the rsi 50 value on the daily chart , buy the next day if it opens higher than the day that the rsi passed through 50.
The rsi value I use is 21 with a smoothing period of 9
Plot rsi 21 with a smoothing period of 9 on CEN. Look at the weekly chart. In the week of October 26th the rsi crossed up through 50 at a price of $24. The stocks closed Friday at a price of $34.
Using the same technique look at BPA on the weekly. The rsi crossing 50 price was 2.15. The stock is now close to $6.
MTOX on the daily . The buy price was $12 in late November. The price is now $18.
I am a short term Forex trader where I use rsi and 20 and 50 period sma to trade Forex on a 2 hour timer frame for good profits (400 - 800% per week).
The rsi is a very underestimated indicator , but a very simple one to use for newbies
Friday March 30th scans bought up YMI. A dead cat bounce ... liekly to close gap to 2.75. Currently it sits at 1.95
I also came up with KTO , that seems to have formed a double bottom on the daily at 11.16. This may go test $14 area. KTO is also confirmed by tsv and ms on the daily
If the rsi goes back down below 50 then the trade has failed and it is time to move on.
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Hi shark .... I have to have some input on this one.
MTMC is not one I would trade as :
1) The volume is very low. I would only need $800,000 to manipulate the price.
2) The primary trend is down
3) Look at the long wicks that are typical on the candles on the days when the stock had volatility , as on Dec 5th. These are when the market makers are setting bull traps , forcing the stock up , making it look like a break out. Then they sell at the higher price as momentum buyers step in. Overall this would be a higher risk stock to trade , unless you were holding for the long term.
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Trading is a hard thing. Find one thing that works for you and stick with it. Do not trade any thing that does not have a risk / reward ratio of 1/2 or higher. Do not trade low volume stocks (under 500,000)
I have found the open range breakout stratergy on stocks with very high relative volume has been working well for me.. just google open range breakouts.
Another one that works well at market opening is the deadcat bounce.... again just google it. You look for stocks that drop or gap down on open and then go up in the 1st 15 - 90 minutes , such as SCT last week on the -75% day .. made 25% on the deadcat bounce play and BPT today ...made 10% in the 1st hour of the market. This kind of play is common .. there is at least 1 every day.
If you day trade sign up for the Platimum service and come over to my club open range breakout .. see what we are doing.
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40 c scalp on a stocks that trades 95,000 shares a day ..to make it worth your time you would have to have bought 1000 shares $32,000 . Much better ones out there to trade intraday .. try OSCI..
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after screaming up in price recently and topping out RSh has pulled back and formed a bullish engulfing bar on Friday. I think that this is going to go and test the recent highs at 17.75
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mambo ....in the future try to trade stocks with liquidity meaning there is enough volume in the stocks. UFPT has an average of 80,000 at best. I do not trade anything with an average daily volume of less than 500,000. I always trade to the long side ..even in this market (and still profit) , although i am mostly day trading right now and catching dead cat bounces after the first hour of trading .
That said with the hammer , which has a long tail that bounced off the 50 day sma I think this stock should rebound. The pattern is there and intraday you could have traded it from 5.49 to 5.7 as it bounced off it's 50 day sma.
However it is not tradeable.the reason for this is that all the money I need to manipulate this stock is $500,000. Most market makers could easily make this stock go up by buying it , making the average investor like you and me thinking that is is being accumulated and rushing in to buy it. This causes momentum in the stock , causing other buyers to keep buying it. Meanwhile I have stopped buying it a fews days ago as retail investors keep on bidding the stock up to it's high , as soon as i have made my target profit I start to sell , causing a decline in the price as I am the dominant market maker and trade the largest volume.
I think that the way you traded the stock is to buy the break out of May high at 6.77, which occurred on June 10th on three times average volume .. so not a bad play at all. however on breakouts stops should always be set just below the breakout resistance line (that becomes support once the stock has broken out). This would minimise your loss should it be a false breakout. Once your stop is set ...DO NOT MOVE IT !!
I have had great success with this trading technique and trade it on all time frames .
Hope this helps a little.
a good volume stock to trade is PPHM .. nice low price , great volatility , formed a hammer candle on friday off 1.3 (longer term support and psychological whole number). Entry would be $1.3 .that is my target entry as I think that it will test this level again (based on the 1 hour chart). Stop below 20 day sma at 1.24 ...target = 1.5 , risk reward = 1:3.5. Peter Worden is still bullish on this one unless it breaks the 200day sma. The tis is a low risk play right now as there is satcks of upside and not much down ..it might even trade back up to $2
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looing at ININ on the monthly , given time it looks like it may test 21.6 level. Looking at the daily the 10,20,50 and 200 are stacked on top of each = bullish . Looking at the 1 hour entry at 11.93 would be good (support on the 1 hour and April high). On the daily I do not see the divergence between ms / TSV . The price has formed higher highs and both indicators have also.
Back to the monthly this stock based for 4 years. Since the beginning of this year the stock has broken out of this consolidation and has trebled in price.
Nice spot
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add OMNI , BLI ,PPHM
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remember guys ...statistically gaps always get filled
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rem ..I am with you on IIP. I think that the reverse stock split is a play to get it on the NASDAQ (has to be $4 to be listed). Could be good in the long term , but would only day trade it now. (it nearly always gives 3-5% a day trading on the 15 min chart ). This one is ceasing trading on July 10th for the stock split.
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