StewyD32 said:
What indicators are you running with?
I'm a primitive charter and only use a few favourite indicators: RSI and MACD for momentum, Bollinger bands for an idea of volatility and breakout from normal volatility.
I also still occasionally resort to moving averages, esp the 200 and 50 dma on daily charts and their rough equivalents on weekly and monthly charts (these being 40 wma and 10 mma to approximate 200 dma)
I pay a lot of attention to
the way volume behaves and whether the chart is changing trend.
Levels of resistance and support are very helpful.
Trendlines and any break or acceleration.
I look for classical patterns (e.g head and shoulders, cup & handle, rounding low, pennant, flag), but also distorted versions.
I resort to japanese candlestick ideas a lot, often combined with volume behaviour, an example being MND below, which I missed primarily because of being nervously susceptible to all the propaganda out there against mining service companies.
Use google, stockcharts chart school, youtube and there are heaps of online texts, imagery and commentaries.
So monthly chart of Monadelphous (MND)
Rounding low occurring over second half 2015, first half 2016
The three candles at the low - small bodied, two are indecisive types.
The three candles at the low occurred at the same level as the gfc low in 08/09 = support level
Volume: an early alerting surge of volume back in early 2015. False dawn or capitulation volume not unusual before the final low.
Powerful breakout volume of March candle following the three candle low (buy signal)
Breakout from 3 year downtrend resistance line by March candle. (buy signal)
Breakout March candle falls back from level of previous low at $8 = resistance.
Price goes on to simmer under $8 resistance forming a 'handle ', breaks through resistance with massive positive July candle. (buy signal)
Next resistance is $12, and price could form a bullish inverse 'head and shoulders' pattern with $12 being 'neckline'
MND decade monthly, with 10 mth moving average added
[imgz=http://forums.silverstackers.com/uploads/1893_big_58.gif]
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MND weekly - W shaped bottom pattern, then ' handle', then break above $8 and outside normal volatility range
MND 2 yr weekly, with bollinger bands added
[imgz=http://forums.silverstackers.com/uploads/1893_big_59.gif]
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