What would it take to trigger a bullish buy signal?

[tiddlywinks]

If I had to trade this particular stock, and I was watching this chart for the past week or two; I'd be long close to EOD on the 13th--looking for some confirmation criteria within 3 days; either noticably increasing volume on a long bar, or a strong close [above the range of the previous bar].

I am on the same page. Long on the 13th, anticipating confirm or failure via volume.

The bigger issue with this analysis is that the volume is BATS, which is notoriously inaccurate for volume work. In some cases completely unusable. In real-time, I would have a different volume source or I would not trade this instrument.

 

[They]

First off, what makes you think that this stock has taken a breather from its trend? Plotting a simple regression channel off of its lows shows that it is perfectly situated in the mid-range of its trend.

For some context, this is not a stock to invest in. The past two years looks like whoever is piloting this company has flown it into numerous microbursts. Do not hold this stock overnight unless you know that all of those overnight crashes only occurred during scheduled earning reports and then avoid future ones like the plague.

That being said, If I was looking for a few day swing trade or an attempt to ride it to new highs I would chase the lower highs down with a buy stop about 50% of a 20 day ATR above the lowering high. After the buy stop triggered I would place the stop loss below the new swing low. (day before entry - day of entry, whatever was lowest)

 

[Growly]

First off, what makes you think that this stock has taken a breather from its trend?

View attachment 188645

Thank you for your reply!
I said "taking a breather" because since may 16th it has been moving sideways-ish. Your regression clearly shows it as in mid range of trend, which confuses me as to what is the proper way to view charts :S
I appreciate your input, and will try to learn from it. All advice is welcome.

 

[murray t turtle]

I think many traders would agree that a close or two or three above that level, plus a re-test of that level in which the former resistance turns into support, with a subsequent close or two back above that level, would potentially be a decent buy signal.

And welcome to the ET forum.

%%
2 or 3 above that level, Mr Growly;
20 or 30 bucks- because on 52 week chart, its still going down. QQQ benchmark is uptrending better; that stock's 52 week range is a bout $25-50.I would never do a single stock that cant even beat benchmark, by more than 2 or 3 %.Like Speedo says, multiple time frames; buy volume[52 weeks]is not near as good as QQQ

52 weeks overhead supply may favor shorts??

 

[cafeole]

Xela , do you think applying constant volume bars on the 6E in conjunction with the Hershey method is the way to go?

Xela is no longer with ET.

 

[tomorton]

Hi Growly - If you're going to trade with trends, I think you need to define what does a trend look like that you (and only you) would like to trade, according to your personal strategy and risk/win rate tolerance. Pus a way to quantify if this is the best trend or maybe there's a better selection in another stock.

I have a range of trend criteria and give a point for each one that is fulfilled. The first three are mandatory so every uptrend trade has to have all 3 - 20EMA above 50, 50EMA sloping upwards, price closes on the dailies above 200EMA.

Additional points come for number of recent weekly bars overlapping, % of weekly closes, highs and lows above 50ENA, number of weekly bars unbroken by 50EMAs, number of weekly bars closing above 200EMA, etc. Simple stuff really.

On the 16th, I get a score of only 4pts out of a possible 12, butd I would look for 8 at least in order to buy, so I would have rated this as low probability.

I hope this train of thought helps in your TA.

 

[Growly]

Hi Growly - If you're going to trade with trends, I think you need to define what does a trend look like that you (and only you) would like to trade, according to your personal strategy and risk/win rate tolerance. Pus a way to quantify if this is the best trend or maybe there's a better selection in another stock.

I have a range of trend criteria and give a point for each one that is fulfilled. The first three are mandatory so every uptrend trade has to have all 3 - 20EMA above 50, 50EMA sloping upwards, price closes on the dailies above 200EMA.

Additional points come for number of recent weekly bars overlapping, % of weekly closes, highs and lows above 50ENA, number of weekly bars unbroken by 50EMAs, number of weekly bars closing above 200EMA, etc. Simple stuff really.

On the 16th, I get a score of only 4pts out of a possible 12, butd I would look for 8 at least in order to buy, so I would have rated this as low probability.

I hope this train of thought helps in your TA.

Tnx tomorton! it helps a lot trying to get the handle on things. following you r method, what do u use as triggers to enter?

 

[tomorton]

Tnx tomorton! it helps a lot trying to get the handle on things. following you r method, what do u use as triggers to enter?

If its a steady and enduring trend, an entry would be good if it catches the start of a recovery from any form of shallow pull-back.

I only enter trades via orders so e.g. if we had 3 consecutive days with lower highs and lower lows in an uptrend, I would set a buy just above the high of the third day. Another entry might be above the high of a daily bar closing below the 20EMA, or the high of a bar that breaches the 20EMA.

There are some named candlestick patterns that meet these criteria but its the criteria that are important, not the entry pattern.