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Watch That Triangle!
A triangle appears to be forming in the S&P 500, and also in the Dow Industrials. We always sit up and take notice when a triangle forms, because it almost always resolves in a major price move.
A triangle is composed of not fewer than five waves (a-b-c-d-e) which ricochet like a pinball between the upper and lower trend lines of the triangle. When the “e†wave is complete at or near a trendline, prices will bounce away from it in the direction of the next major move. As prices exit the triangle at the opposite trendline, we can measure…
24Oct2008 | William Kurtz | Comments Off | ContinuedRicochet Romance
The Dow Industrials Index bounced hard off its January 22 low. The price bar of the Industrials’ Daily chart for that day shows a picture-perfect very large “Hammer†at the end of a long decline, which foretold a reversal of trend and a rise in prices. It was confirmed the next day by a tall white bar sporting a very long lower shadow, or tail. Three bars together, as a group – the Hammer, the black bar which preceded it, and the tall white bar which followed it – were a variation on a “Morning Star,†which is a bullish…
17Feb2008 | William Kurtz | Comments Off | ContinuedBroken Trends & Symmetrical Triangles?
A trick or two from the technical vault…
While I certainly appreciate a good fundamental overview of a particular stock to support a bullish or bearish argument, one cannot gain a greater understanding of timing mechanisms without honing in on the technicals of a stock.
In the chart of Schlumberger (SLB:NYSE) below, you can see two key technical setups, the first being the basic trendline. See how shares snuggled close to the line. Once the stock bounced off two consecutive uptrend points, we can then plot its trendline. In October, the trendline was broken and you could have immediately taken profits and…
30Jan2008 | S. Oakes | Comments Off | ContinuedTrend Lines Part II
In a typical downtrend we see that the stock has broken through its support and begins a trend characterized by lower lows and lower highs. Note that when the stock will break this trend by making a higher high and a higher low.
Trend lines help us to get a general overview of how healthy the stock is technically. These lines help buyers find dips and excellent buying opportunities. On the flip side, once a downtrend begins to emerge, shorting (selling first, then buying to cover position) may be the best strategy for short term traders.
Do not base your trades on…
23Jul2006 | S. Oakes | Comments Off | Continued
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