Today, i would like to share some Technical Analysis logics. This post will be similar to the previous posts, I Came, I Test, I Conquer with VOLUME!!!
Lets look at the charts. Let's identify some similar patterns and hope we can apply what we discuss today in the similar charts. Do remember that, Technical Analysis is not 100%. The most important elements for Technical Analysis for me is the Price Action and the Volume.
To recap the important points, Price Action is the most important because the delta/difference is the one determines whether we are earning or losing. The Price Action needs to be supported or validated by the Volume. Volume reveals activity. Volume reveals the truth behind the Price Action. Volume validates Price.
1. BIOHLDG
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| BIOHLDG Daily Chart |
Notice the spikes which i draw with a blue spheres. The spikes in the price are validated by the spikes in the volume. The price action is aligned with the volume. And notice after that, the volumes are low and the price is hovering around that area. Those who created the spikes are normally not retailers, they can be market makers, fund houses or institutional investors. In short, i will call them "they". Once they spiked up the price and volume, they will wait. Wait for a few days or weeks to wash the impatient retailers away before creating another spike.
Then, those retailers who sold the stocks will regret because they sold it too early. This phenomena is very normal for them to wash away the retailers. Question, how do we know that they are still in these counters? Well, if they had sold all their shares, we will see a similar spike of volume but the price will be falling down, creating a bearish engulfing. But what i discuss here might not be true, maybe some of them will sell partially day by day. We can never know what they are thinking, because we are not them.
Then, those retailers who sold the stocks will regret because they sold it too early. This phenomena is very normal for them to wash away the retailers. Question, how do we know that they are still in these counters? Well, if they had sold all their shares, we will see a similar spike of volume but the price will be falling down, creating a bearish engulfing. But what i discuss here might not be true, maybe some of them will sell partially day by day. We can never know what they are thinking, because we are not them.
Understand the example given? It's okay. Now, lets look at other examples.
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2. IWCITY
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| IWCITY Daily Chart |
Notice the spikes in the volume and the price? Then after that the volume is sleeping. Those impatient retailers will chase in and had to sold off their shares if they do not have cash to pick up. For IWCITY, we can spot an ascending triangle. I anticipate another round of spike up in price and also volume soon. But dont know when...
3. MMSV
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| MMSV Daily Chart |
MMSV is another good example. Saw the spikes in volume with the price? Then the volume goes to sleep before another spike in volume and price. We can draw an ascending triangle with a golden triangle in MMSV. MMSV now testing the resistance of 1.03 and if can stay above 1.03 for more than 5 trading days, then 1.03 can be a support for MMSV.
4. SYSTECH
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| SYSTECH Daily Chart |
SYSTECH is now in an uptrend channel. And again, look at the volume. Notice they have the same pattern? SYSTECH just broke the resistance of 0.31 today.
5. OCNCASH
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| OCNCASH Daily Chart |
Similar goes to OCNCASH. Look at the price action and volume drawn in blue eclipse. If OCNCASH can stay above 0.73 for more than 5 trading days, 0.73 will be a support for OCNCASH.
Let me summarize this.
If there is a spike in both volume and price, and the price is hovering around with low volume, there is a possibility that there might be another spike. Take note of the resistances and supports if you want to operate on it. Remember to respect your cut loss or your take profit point. From the examples above, BIOHLDG, IWCITY, MMSV, SYSTECH and OCNCASH, i guess these are all very good examples. Do share your views or comments or counters that had similar pattern and let's study it together.
Remember, investing alone will be boring, investing together with your friends is fun~
Even if we are just retailers, we must also be a knowledgeable one.
If you like my way of analysis and you haven't join me in my facebook, appreciate if you could like my FB page, https://www.facebook.com/gainvestor10sai/?fref=ts
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Let's Ride the Wind and Gainvest
Gainvestor 10sai
3 May 2017
12.16am
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