Tuesday, July 24, 2007
Technical Indicators
Volume Accumulation
Read More...Created by Mark Chaikin, the Volume Accumulation Oscillator shows the cumulative volume adjusted by the difference between the close and the midpoint of the day's range.
Compared to the On Balance Volume (OBV) indicator which assigns all the day's volume to the buyers if a security closes up or to the sellers if it closes down, Volume Accumulation uses the relationship of the closing price to the mean price to assign a proportion to the volume.
Use the Volume Accumulation Oscillator as you would the OBV and let volume confirm a trend. A rising price trend will be confirmed by a rising VA line. An uptrend paired with a rising Volume Accumulation line is considered bullish while a Volume Accumulation line that diverges from the price direction of movement should warn of a near-term price correction...
Compared to the On Balance Volume (OBV) indicator which assigns all the day's volume to the buyers if a security closes up or to the sellers if it closes down, Volume Accumulation uses the relationship of the closing price to the mean price to assign a proportion to the volume.
Use the Volume Accumulation Oscillator as you would the OBV and let volume confirm a trend. A rising price trend will be confirmed by a rising VA line. An uptrend paired with a rising Volume Accumulation line is considered bullish while a Volume Accumulation line that diverges from the price direction of movement should warn of a near-term price correction...
Trading Education Tutorial
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Moving Averages and the Trend
Moving Averages Help Us Identify Trend Reversals
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Moving Averages and the Trend
Moving Averages Help Us Identify Trend Reversals
One of the old axioms of technical analysis is that 'the trend is your friend'. This holds true, as long as you trade in the direction of the trend. However, your 'friend' has two faces, and can turn on you to eliminate profits (and your friendship!). Trend reversals can occur at any time and one of the important skills a trader must possess is the ability to identify a reversal. It is easy to exit a position too early if we over-anticipate a trend reversal, and just as easy to watch our profits evaporate if we are too slow to exit the trade.
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NASDAQ Chart of the Day
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Daily Trading Signals
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EVVV has broken a clear upper trend line to the upside after getting a big breakaway gap on increased volume. Look for more strength to the upside, especially if this stock can top 18.00.
Daily Trading Signals
NYSE Chart of the Day
Courtesy of Nirvana Systems
Daily Trading Signals
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PXD has built out a potentially bearish head-and-shoulders pattern at the highs of the Spring advance. A downside break through the neck line (support) at 47.25 could make for clear weakness ahead. Otherwise, look for strength from this support level.
Daily Trading Signals
Daily Market Commentary
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Updated Monday, 7/23 for Tuesday's market.
Bounce from Support...
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Updated Monday, 7/23 for Tuesday's market.
| Key DOW Levels for 7/24 | |
| UP | Above 14,050 |
| DN | Below 13,775 |
Bounce from Support...
- Dow extends Friday's bounce off 13,800 support, gains 92 points. The index trended slowly higher throughout the day and eventually closed the day with a nice 92 point gain, but remains beneath the key resistance level of 14,025.
- The NASDAQ and S&P each pushed slowly higher today, but were far less bullish than the Dow. Each index remains above near-term support, which we will continue to watch for a potential break or bounce.
Summary
The Dow ended the day with a nice gain, but looks fairly lackluster after the initial strength at the Open. The index remains within the confines of the large consolidation range, which will be the key pattern to watch for the next big breakout move.
- The NASDAQ and S&P each pushed slowly higher today, but were far less bullish than the Dow. Each index remains above near-term support, which we will continue to watch for a potential break or bounce.
Summary
The Dow ended the day with a nice gain, but looks fairly lackluster after the initial strength at the Open. The index remains within the confines of the large consolidation range, which will be the key pattern to watch for the next big breakout move.
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Trading Education Tutorial
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Double Tops and Bottoms
Waiting for the Setup to Complete Results in Profits
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Double Tops and Bottoms
Waiting for the Setup to Complete Results in Profits
There are various chart patterns that help us find good reversal candidates. Of the major reversal patterns, the double top or bottom is not only one of the most recognizable, but also one of the most predictive.
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Technical Indicators
Ease of Movement
The Ease of Movement Indicator was designed to illustrate the relationship between volume and price change. It shows how much volume is required to move prices.
High Ease of Movement values occur when prices are moving upward with light volume. Low values occur when prices are moving downward on light volume. If prices are not moving or if heavy volume is required to move prices then the indicator will read near zero.
A buy signal is produced when it crosses above zero (an indication that prices are more easily moving upward ). A sell signal is produced when the indicator crosses below zero (prices are moving downward more easily).
Read More...The Ease of Movement Indicator was designed to illustrate the relationship between volume and price change. It shows how much volume is required to move prices.
High Ease of Movement values occur when prices are moving upward with light volume. Low values occur when prices are moving downward on light volume. If prices are not moving or if heavy volume is required to move prices then the indicator will read near zero.
A buy signal is produced when it crosses above zero (an indication that prices are more easily moving upward ). A sell signal is produced when the indicator crosses below zero (prices are moving downward more easily).
NASDAQ Chart of the Day
Courtesy of Nirvana Systems
Daily Trading Signals
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CLWR took a big move higher yesterday, but has pulled back from highs on high volume today, leading to the possibility of a bearish volume climax pattern. Look for weakness through 28.50 for signs that the gap could be filled.
Daily Trading Signals
NYSE Chart of the Day
Courtesy of Nirvana Systems
Daily Trading Signals
Courtesy of Nirvana Systems
SON broke two key lower trend lines with one fell swoop today, as the stock took a large gap down through the 40.00 level. Look for more weakness out of this stock, especially if it remains beneath 42.00.
Daily Trading Signals
Daily Market Commentary
Courtesy of Nirvana Systems
Updated Friday, 7/20 for Monday's market.
Back to 13,800...
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Updated Friday, 7/20 for Monday's market.
| Key DOW Levels for 7/23 | |
| UP | Above 13,915 |
| DN | Below 13,775 |
Back to 13,800...
- Dow sells off heavily back to 13,800, closes session lower by 149 points. The index recovered nicely after bottoming out at 13,800 and rallied 100 points before closing the day with a big 149 point loss.
- The NASDAQ and S&P each sold off heavily throughout the first part of the session and are now holding within the boundaries of larger ranges. Watch support for early direction Monday.
Summary
The Dow closed the day well off from the 14,000 level and could be on the verge of a larger decline should the 13,800 level give way. Watch 13,800 and 13,900 for signs of direction early next week.
- The NASDAQ and S&P each sold off heavily throughout the first part of the session and are now holding within the boundaries of larger ranges. Watch support for early direction Monday.
Summary
The Dow closed the day well off from the 14,000 level and could be on the verge of a larger decline should the 13,800 level give way. Watch 13,800 and 13,900 for signs of direction early next week.
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