1 / 33

Chart School!

Chart School!. Mike Cintolo VP of Investments and Chief Analyst Cabot Market Letter, Cabot Top Ten Trader mike@cabot.net. Primer. Stream of Consciousness Looking for Familiar Faces “Seven-in-10 Rule” Supply & Demand is the Aim. Daily Chart: More detail, less perspective.

wynona
Download Presentation

Chart School!

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Chart School! Mike Cintolo VP of Investments and Chief Analyst Cabot Market Letter, Cabot Top Ten Trader mike@cabot.net

  2. Primer • Stream of Consciousness • Looking for Familiar Faces • “Seven-in-10 Rule” • Supply & Demand is the Aim

  3. Daily Chart: More detail, less perspective Chart is nine to eleven months 25-day moving average (thin black) Stock’s daily movement Stock’s daily volume 200-day moving average (thick green) 50-day moving average (thick black)

  4. Weekly Chart: Greater perspective, less detail Chart is three years 10-week moving average (thick black) Stock’s weekly movement Earnings line 40-week moving average (thick green) Stock’s weekly volume

  5. Market Timing: Trends the Key Nasdaq Summer/Fall 2008 Cabot Tides Sell • Big Moves are What Really Count! • Simple, common moving averages work best

  6. Support/Resistance: Nope

  7. Secondary Measures: Defense vs. Growth XLP – Consumer Staples (Defense) SOX – Semiconductors (Growth)

  8. Watch the Big Leaders AAPL January 2008 Nasdaq January 2008 FSLR January 2008

  9. Characteristics of Sound Bases • 20% to 35% Deep Usually Best • Bullish Volume Clues • Many Weeks Long • Tightness at Lows and Near the End • Smooth Pattern

  10. Buying: Bases and Breakouts CROX first base fall 2006 6 weeks up Tight Bases = Launching Pads Best if formed during Market Corrections 10-week RP confirms New issue Lots of “tails” Demand Vol Dry Up

  11. Base-Within-A-Base If Base > 40% deep, expect multi-week, tighter base at end Tighter, proper structure (25%, 16 weeks) 55% from top to bottom

  12. Volume Clues Market in Correction, AAPL building a base Gap Up on Big Volume Support

  13. Volume Clues When buying a breakout, want OVERWHELMING volume – 200% or more vs. average Up 60% in four months GMCR up 40% (!) on 9x Avg. Volume

  14. In Gear vs. the Indexes? S&P 500 AMZN new highs ahead of market

  15. In Gear vs. the Indexes? S&P 500 in obvious, clear downtrend MYGN out of gear, fails after market gets going

  16. Big Liquid Breakouts Always respect big breakouts from liquid growth stocks! STP is liquid, in good group, stages big breakout – I missed it!

  17. Buying: Stocks in Uptrends 6+ weeks up in a row a sign of persistent accumulation Another 13 weeks in a row! 13 weeks up in a row right as bear market ends!

  18. Smooth Uptrends Notice how EBAY’s uptrend is smooth and persistent EBAY doubled from this point during next 18 months

  19. Prepare for Shakeouts Don’t freak out over one- or two-day wiggles Big reversal on huge volume Bull retreats usually sharp, brief = scare you out Just a blip!

  20. Prepare for Shakeouts Bull retreats usually sharp, brief => scare you out

  21. Tightness a Good Sign Tightens up TASR advances 300% in next four months! Light volume

  22. Quiet also a Good Sign Notice small, tight weekly ranges and dry-up in volume. The eye has come off the stock!

  23. Selling is the Hardest Part • You’ll either be Too Early, or Too Late • No One Perfect Rule • When in Doubt, Trail your Stop • Decide Ahead of Time How to Handle

  24. Moving Averages 50-day line is a simple, effective trailing stop ... but it’s not perfect A couple of shakeouts but adheres to the 50-day for months

  25. Moving Averages Weekly chart with 10-week line works, too Sell on decisive break of 10-week line

  26. Moving Averages With a big winner you can use 40-week line (200-day) to give stock more breathing room Sell! Hold through big corrections b/c huge profit

  27. How Far From Last Base? No set time is “too long” but > 6 months without consolidation is long Running for 7 months Breakout

  28. Out of Trend on Upside Above multi-month uptrend Harder to define but can provide a heads-up to book partial profits

  29. Volume Resistance Cluster of big-volume selling creates resistance in intermediate-term

  30. Earnings Gaps 8 times out of 10, a crushing earnings gap => lots of downside ahead Falls another 95% over next year!

  31. RP divergence + Huge Selling RP fails to confirm twice, each time followed by big selling

  32. Two/Three Gaps in a Row Two or three gaps after upmove can, at times, put in short-term top Three gaps in a row

More Related