The 7 Signs of an Ascending Triangle

The ascending triangle is a bullish formation that usually forms during an uptrend as a continuation pattern. There are instances when ascending triangles form as reversal patterns at the end of a downtrend, but they are typically continuation patterns. Regardless of where they form, ascending triangles are bullish patterns that indicate accumulation. - Stockcharts.com

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BONUS: Where is EW now?

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Case Study: NRCP

As of 03-01-13

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Case Study: Bloom

 BLOOM Chart as of February 28, 2013

Touched previous resistance of 15.08
Next Resistance 15.9
MACD buy signal
RSI at 72.44 level

CASE STUDY: APM

A-nother P-rofit M-aking?

Will there be another upside for APM?

Yesterday it closed strongly at .165, breaking its major resistance at .162 with a higher volume than previous days. MACD released the BUY SIGNAL for this stock.

If this stock breaks the major resistance at .169 which is the All Time High (ATH) where do you think APM will go next? Hmmmnnnn… 

LET’S RIDE WITH ZEUS

Riding with ZEUS is a very LOOOONNNGGGG journey and surely you will enjoy the ride.


WARNING:  The following stocks are not for “MAINIPIN” (impatient)


This strategy works for those who has the money to invest, but have no time to monitor the ticker, board, and price actions and other stuffs used by the Tsupiteros and Tsupitera; Or maybe this could be a strategy for those who think that time deposit, SDA, RTB, Treasury Bonds and alike are best chose to be invested in. This is a strategy that will also fit for those who are preparing for their retirement.

Highly recommended for LOTTO JACKPOT WINNERS!

So hop in and enjoy the ride…..

# MEG

You can enter day after zeus strike 03/19/2012, say you have entered in the highest price, 1.89, as of writing current price is 3.9. You have approx gain of 106% in 313 days.


#APM

Day entered: 06/29/2012
Price on the day entered: .017
Current Price:.16
Gain: 841%
Days: 242

#EEI

Day entered: 12/02/2011
Price on the day entered: 3.33
Current Price: 12.6
Gain: 278%
Days: 452

Using above strategy, you are trading with no dubdub, mild heart attack and much study on stocks, all you have to do is to wait for the candlesticks to breach the blue line. So sit back, relax and enjoy the profit!

Case Study: POPI

As of 02-25-13

Observations:

• Support at 38.2% Fibonacci = Php0.67
• Support at 20-EMA (light blue line)
• MACD about to make a higher low (I'm hoping). Histogram is somehow "bottomish"
• Consolidating since 01-25-2013

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Notable brokers are present: 

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F. Yap Sec - this broker will just pad at 0.67 to support the price. 

David Go Sec - this broker will just sell. Maybe done thru transactions from F. Yap? :)

COL Financial - "nuisance"

Tower Sec - "Tsupitero na naipit?"

Case Study: LR

LR chart February 25, 2013

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Today we saw LR stock formed a bullish hammer candle from a downtrend.

A hammer is a candlestick that has a small body with a long lower shadow and should have no upper shadow.

Currently LR price is at the 50% level Fibonacci, acting as support.

RSI is about to cross the 50 Line – see more about the RSI here

LR is oversold in the Stochastic indicator and is about to give out buy signal. To learn more about Stochastic, check out this site

If the bounce continues then LR may reach and try to break once more the resistance at 9.30

CHART UPDATE February 26, 2013 CLICK HERE

Case Study: PSE

Rumors here and there...

100% Stock dividend... Merger... Etc etc...

Honestly, I shy away from reading all those news... true or not...

It clouds my mind. It messes with my emotions. It leaves me in a delusional state.

Let's quiet the noise and focus on the charts.

Chart as of 2.26.2013

In blue box 1, there was a sideways movement at the highs (above 23% fibo) that broke out a little over a month after MACD gave a SELL signal.

After the breakout, we saw a Gravestone Doji that signaled a possible reversal. But prices held up nicely and is currently consolidating at the highs again (above 23% fibo). And again MACD gave a SELL signal just a few days ago. 

Sometimes, SELL signal on MACD actually means BUY.

Let's watch if it is indeed a BUY on this particular stock.

So I'm monitoring box 2 closely.

If it breaks out, it could reach its minimum target -- 52 week high of Php 500.

Will there be a repeat? 

I'm giving it a month or two...

Don't forget to set your stops.

 Case Study: TA

Chart as of 02.25.2013

 

 

 

Chart as of 02.27.2013

 

 

 

 

Surprise Surprise! A SELL signal that actually means.. a BUY

Oftentimes, when we see the MACD give a sell signal, we sell. 

You might have sold your TA right before or after the sell signal popped out, thinking that you might have actually put one over the market and sold before most of the people did.

Well... not that easy..






















 
If a stock is consolidating at its highs, and a sell signal pops out, it might actually tell us to BUY THE DIP. Notice how TA's price rose a few days after the sell signal appeared (as high as 32%) and another 14% when MACD gave the signal when it was consolidating at the highs (again)...
 

If you're not convinced.. you might want to see the chart below

 

Case Study: VMC

After waking up from hibernation, VMC is trying to get up... starting to build up momentum and continue where it started (up to 5.50 pesos). Or is it???

Here is the 3 month chart of VMC. Notice how the current price action stays within the 38% fibonacci range? In my books, this is a good quality base building. BETTER THAN MIH's to be honest.

But what will be the story to propel this to newer highs? Does it even need a story? I am not a fundamentalist but when I tried to compute its fair value (with my very limited fundamental analysis skills) I was able to get 1.75 pesos... That is a 14% upside from the current price. If you don't believe me, let's just stick with the 3 month high at 1.65 pesos. That is still a 9% gain! 

Just be vigilant. 

To save you from unnecessary stress, make sure you buy at SUPPORT because 1.54 appears to be a MAJOR RESISTANCE!

Disclaimer: I am not selling to you this stock.

Case Study: MHC

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March 4, 2013 UPDATE!!!

When I was a child, I always asked my mother what accumulation smelled like. She said "Son, I will not let you brush your teeth for a week then tell me what it smells like..."

Will there be a play soon? 

Just don't forget the discipline on SUPPORT and RESISTANCE!!!

Toilet Paper: A Case Study on EG

Have you tried burning toilet paper before? It disintegrates in the air... Try it and see for yourself! Be amazed!

Say hello to EG. It is a new brand of toilet paper. 

Cheaper than any bathroom tissue you could find in the market.

I won't say this is a useless basura stock... You can "range trade" it inside your plotted Darvas Box. 

You should note that a breakout is just a bonus. It is not really part of your trading plan when range trading.

Even your favorite brand of toilet paper has a price when you buy it in any sari-sari store. 

JUST MAKE SURE YOU BUY AT THE SUPPORT AND SELL AT THE RESISTANCE... Otherwise you'll be amazed as you watch your Toilet Paper disintegrate in the air...

MER – A Breakout Story

Looking at the three-year chart of MER, it’s been inside the triangle for quite some time. The upper line seemed like a very strong resistance until recently that we saw MER’s breakout.

Take a closer look at MER’s weekly chart:

There’s what we call a ZEUS STRIKE wherein moving averages are perfectly lined up to each other.  Conventionally speaking, it happens when

20EMA > 20SMA > 50SMA > 100SMA

Seeing the breakout, plus that beautiful legendary strike, I put nearly half of my port in MER without hesitation.  And Zeus didn’t disappoint! :) One month hold gave me 17% profit  (not bad, i guess). 

What made me sell the stock is the following chart:

Looking at the weekly chart, MER is already at the top of a channel that we do not know yet if will be broken or not.  It’s better to be at the safer side. :)

Plus, knowing that the market has gone up too high already, we may see profit taking on several stocks which does not exclude MER. We can always buy back when the direction is clearer. On my part, i will buy when it breaks out of the channel and if not, will wait at the lower end. Patience is the key! ;-)

OV – A Classic Case Of Bull Trap

There are times when we are too bullish on a stock, expecting a breakout or some wild ride ahead.  But at the end of our eager anticipation is a deadly trap.

Take a look at OV.

OV had been consolidating inside the darvas box for two months and everyone was expecting a breakout. 

Breakout occurred with the price piercing the upper end of the box.  But the next day, candlestick registered a doji which indicates indecision among the crowd (PD: I bought at the doji.hihi..). This implies that the breakout could not be sustained.  The next three days confirmed it, with the candlesticks piercing the box’s lower end. 

We can also see that during consolidation, MACD and RSI showed bearish divergences which imply that the impending breakout could be weak.

Being a newbie then, i know nothing about all these warning signals.  I didn’t cut and still was an expectant bull.  But in the end, i was..

Darvas Box

Konti na lang, Darna na... Pero in a box.

Darvas Box works according to the basic stock market principle of "Support/Resistance."

During breakouts, the resistance of the box becomes the new support. During breakdowns, the support of the box becomes the new resistance.

Every box you have plotted becomes a reference for future price action.

REMEMBER: Buy on support (if support doesn't break), sell on resistance (if resistance doesn't break). 

Notice how each box identifies the next possible support/resistance when breakout/breakdown occurs?

LC has been trying to break the resistance at 1.21 but already failed twice. Possible short term double top or only building up momentum, waiting for the 50 day MA to cross the 100 day MA convincingly? Wait with discipline and see if the support at 1.10 holds.

MIHB has been consolidating for about a month now and it is nearing the resistance at 18.00.



In the stock market, discipline is key. Don't try to chase prices! 

Wait for the next train... lagi naman may tren sa MRT... kung gusto mo, mag bus ka! Pwede rin lunok ka bato tapos sigaw ka "Darvas!" 

Blowoff - Bull Trap Combo

Look at the 3 examples.

Spot the similarities.

Now you know how to spot a Blowoff - Bull Trap Combination.

Best to sell a few minutes after the gap up opening..

Before your 

Turns to

 (Click here for more post on blowoff)

Blow-off – an exhaustion move!

When you see a very sharp spike followed by a severe decline in price accompanied by a huge volume, then it’s a “Blow-off”.  It signifies the exhaustion from panic buying of the bulls resulting to sell off of the stock.

See below chart of MJC stock as Blow-off sample

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Here are some of the reasons why there is a significant increase in volume:

a. News
b. Earnings release
c. A rumor
d. other factors


Blow-off is a sign which tells us to sell ASAP and saves us from the bear phase.

Blow-off indicates a major resistance level.

Moving Averages as Triangles

It is a known fact that MAs act as areas of support and resistance
When price moves above all MAs, stock is on an uptrend (and vice-versa.)

BOOOORIIIING!!!

The excitement comes in when price is trapped inside two converging MAs.

When two different MAs are about to cross, they usually form a triangle.
Symmetrical, ascending or descending.
They are all the same to me.

At the opening of the triangle, price usually moves sideways.
Up and down. Up and down.
Testing support and resistance.

BUT!! As the trading days continue, that window gets smaller and smaller giving the price less room to move into.

And when the price can't breath anymore, what happens next?
Yes, a breakout or a breakdown.

Here are some examples:

BREAKOUTS
BREAKDOWNS

So what to do in this type of scenarios?
In my case, I only buy on breakouts. Just to be safe :D
But others use indicators like MAs, MACD and RSI to supplement their analysis.

So what's your take on these three stocks? Charts as of 02-15-13