Category: Trading Articles

Looking to breakout on multiple time frames

Oil patch is starting to heat up for investors

With OPEC now perceived as serious about moving prices higher, it finally looks like a bottom is really in for the oil market. Here's the current neoclassical technical view (from a weekly perspective).

This sector of the market is a fertile area to be focused on. There are many stocks in the various oil related sectors that are set to break higher which is why TA Today mentors and I have been evaluating stocks in the sector for purchases. I'll share a couple of them with you today.

UNT is an oil and gas driller that possesses all the positive neoclassical markings one would like to see. Future price projections are huge and the stock broke out on all time frames last week which is the strongest neoclassical signal you can get.

Breaks out on all time frames

That was contribution from a neoclassical member. Here's another one that I had found, RES which is an oilfield services (oil and gas) and equipment provider. With production likely to ramp higher, they should see more business.

Breaks out on all time frames

Whether one legs into names like the above or picks of their own, one needs to have some longer term exposure to this sector in some form as many of these stocks remain heavily discounted from two years back and have a lot of topside potential still in front of them.

 

This article originally was published on MarketWatch on Oct 4, 2016 12:57 p.m. ET

  • Written by LA Little

Category: Trading Articles

Expect this market to find its footing sooner rather than later

Friday provided resets on the mean-time-to-failure (MTTF) statistics that we track in the neoclassical model, a model that I created and shared with the public here and here.

Read more: Expect this market to find its footing sooner rather than later

  • Written by LA Little

Category: Trading Articles

Breaks out

These 3 stocks are set up for big breakouts

Last week we outlined how to identify potentially great trades using Alibaba as an example as it shined bright. This week there are over 75 trades that qualify for the same analysis. Finding potentially great trades using the neoclassical tool, Trading Signals, isn’t the problem – it’s sifting through all the potentials and picking out the best of the best.

This week I offer up a few more stocks that have broken out on multiple time frames as of last Friday. The first is in the biotechnology arena - Amphastar Pharmaceuticals Inc. (AMPH). 

The charts on this one are spectacular not just due to the breakout but due to the potential to carry farther which can be seen on the monthly time frame ... all-time highs now

Breaks out

Another stock is in the oil sector, Baker Hughes Incorporated (BHI). There were about 8 stocks in this sector and one could choose any of them including this one.

Breaks out

On a conservative basis, a 10-12% gains looks doable even if that's all there is. Like Alibaba last week, BHI has a similar setup with breakouts on the daily and weekly charts and the potential for even larger gains if crude oil does work higher.

The final name is in the transportation sector which has struggled for two years but you couldn't tell that by looking at this stock on the daily and weekly time frames - Kansas City Southern (KSU).

Breaks out

Both the daily and weekly time frames are just plain strong

Breaks out

As seen in the charts, the setup is the same – breaks of swing point highs on the daily and weekly charts simultaneously and sometimes the same on the monthly time frame. That is the setup that provides the best opportunity for a continued move higher without an immediate retrace and thus, the reason for calling them potentially great trades. In fact, the statistics show that a successful breakout with this common characteristic will likely carry higher for two to three bars on the greatest time frame witnessing the breakout – the weekly time frame in two of the three cases and the monthly on AMPH.

The problem with this market isn't getting good setups - it's figuring out which ones to take out of the plethora of opportunities.

 

 This article originally printed on Marketwatch Aug 23, 2016 9:04 a.m. ET

  • Written by LA Little

Category: Trading Articles

The charts have good things to say about Intel and the dollar

While Intel and the dollar aren’t directly related to each other right now, the two are currently building ABCD structures that suggest a bullish slant for both. 

Register to read more...

  • Written by LA Little

Category: Trading Articles

Mulitiple Swing Point Danger on S&P

Alibaba- Identifying potential great trades before they happen

Although it might not be immediately obvious, finding great trades and investments via the neoclassical technical analysis model is pretty much the opposite of avoiding potentially damaging losses using the same methodology. Let’s consider that for a moment.

If you have read articles I’ve written in the past, you know the one thing that all traders and investors must avoid at all costs is a breakdown on multiple swing points on multiple time frames. Borrowing from an article written many moons ago (August of 2015) here’s a portrait of what that looks like – before it happens.

If we were to look at the short term time frame as well, a similar set up was occurring there. Breaks of multiple swing points on multiple time frames is a necessary, though not sufficient, condition for significant losses and potential bear markets.

That was August of 2015 and now a year later the market is setting new highs on a regular basis and once more the potential doesn’t become the actual. So what about bullish setups that one can take advantage of?

Well, it just so turns out that great bullish trades have the exact same characteristic – multiple breaks of multiple swing points on multiple time frames only up rather than down. And like most technical analysis, the more the better.

Once such great trade began to setup recently, a trade relayed to TA Today members in our unique cradle-to-grave videos prior to the breakout and also as an addition to our members-only trading portfolio. The stock was Alibaba and the charts look like this now.

On the daily time frame, the stock broke out the day prior to earnings but the potential for that breakout across multiple time frames had us entering the position just prior to the breakout on August 8th. On the very next day it broke a swing point high and again the following four days. That possibility of a strong fast move higher is what got us involved.

BABA Daily Breakouts

But it isn’t just a breakout on the short term time frame that creates the setup for an exceptional bullish trade, it’s the breakout on multiple time frames. Here’s the weekly chart.

BABA Weekly Breakouts

As you can see here, the setup to break over not one, or two, but instead three swing point highs in one fatal swoop existed and that is exactly what took place this past week.

These are the highest probability trades that one can find and they work both ways – up and down. It is the recognition of such a trade and the execution of it with a higher percentage of ones funds that allows one to outpace the markets with a lot less risk. In this case, a 15% pop with very little risk in a single week. What’s better, it is unlikely to stop there. Take a look at the monthly chart.

BABA Monthly Breakouts

Finding and executing high probability trades that have the potential to be great is a huge part of successfully trading/investing in the markets. Finding and identifying multiple swing point breakouts before they break out is a key cog in that wheel of success and at TA Today we have to tools to do just that.


This article was originally published on Marketwatch on Aug 16, 2016 12:40 p.m. ET

  • Written by LA Little