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Can you elaborate a bit on the Wyckoff
Criteria?
Tony
<span
>-----Original Message-----
From: Harold O. Courtney
[mailto:hcourtney@xxxxxxxxx]
Sent: Monday, June 09, 2003 11:07
PM
To: Metastockusers@xxxxxxxxxxxxxxx
Subject: [Metastockusers] TSG
Trade in MS
<span
>
This is a short-term pullback play. I use MS to scan for
stocks in strong uptrends w/good relative strength. I then visually scan these
charts to find those coming out of strong bases that meet <font
face=Arial>Wyckoff<font
face=Arial> criteria and I refine it further by
looking for cross-verification thru a convergence of different elements of
support and resistance - trendline, ma's, Fibs, ect.
In Sept and Oct last year TSG reaches a Selling Climax (SC)
after a sustained sharp downtrend. This is followed by an Automatic Reaction
(AR). According to <span
>Wyckoff<font
face=Arial>, the SC and AR define the <font
face=Arial>Trading<font
face=Arial> <font
face=Arial>Range<font
face=Arial> (horizontal yellow lines).
After attempting and failing to breakout of the range 12/02
price forms a descending triangle. On 3/10 there is a shakeout (SO) at the
bottom of the range. Note the relatively strong volume and the close in the
upper half of the bar and back into the range here. A nice reversal bar.
In late Mar and early Apr price consolidates around the
flattening and converging 20d and 50d ema's and sits at the apex of the
narrowing triangle as volatility winds down. 4/21 a huge breakaway gap on
strong volume above the downtrend line and both the ema's, as the 20d crosses
above the 50d.
In early May price hits resistance at the top of the range
and the now flat 200d ema, where it consolidates. Note the low vol and how
price hugs both these converging major resistance points, refusing to go down.
5/13 a strong breakout above both on a wide spread and huge volume. RS vs
S&P is very positive here.
Now I'm looking to enter on a pullback if it's positive. On
5/14 the reaction begins on strong down vol, but the bar is narrow and does not
retrace even half of that previous massive breakout bar. 5/15 is a very narrow
spread on low vol and little price loss. 5/19 a wide spread on relatively
strong vol, which suggests weakness, but then look what happens, there is no
follow-thru: 5/21 a wide spread closing on the high on strong down vol, the
body of the candle closing smack dab on the flat 200d ema and the rising 20d
ema, a Dragonfly Doji. That's real purty, imo. This convergence appears to be
very positive sign for a reversal bar and a resumption of the rally.
So I set a buy stop just above the top of this bar at 21.77
w/a protective stop just below the low at 20.77. My profit objective is just
under the previous high at 23.73 so I'm looking at about a 2:1 reward:risk
ratio. I trail my stops each day to the day's lows. Because vol on the rally is
unimpressive I scale out half my position after I've made 1 pt at 22.77, then
close out the rest of the position on 5/29 when my objective is hit.
Yes, it's a small gain but I'm a swing trader, that's what I
do. Believe me, these little buggers add up. As always, money management and
risk control are essential to the strategy. Safety first, profits second.
Harold <span
>
<span
>
<span
>
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