SECTOR REPORT (ENERGY) – June 3, 2020

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A theme develops when we see several bullish or bearish chart patterns on the price charts of an industry/sector. At Tech Charts, research and idea generation is based on a bottom up approach. That means I start with individual names irrespective of market, sector or geography. As I find new opportunities that fit my criteria I add them to my watchlist. Sometimes I see several similar chart pattern developments and when I start working on my short list I come across developing themes. Read More

GLOBAL EQUITY MARKETS – May 30, 2020

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REVIEW

The benchmark for the Global equity markets performance, the iShares MSCI All Country World Index ETF (ACWI.O) is testing its 200-day moving average that is acting as resistance at 71.7 levels. Last two month's price action can be identified as a rising channel. Price can remain inside the trend channel. There is a gap opening between 69.2 and 67.8 levels which can be filled during a possible pullback.

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INTERIM UPDATE – May 29, 2020

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I start my research on Mondays and finalize by end of day Thursday. Friday is dedicated to putting all ideas to the report format. During the week I come across good setups and those are featured in the weekly report. However, there are those that pop during the week and is worth bringing to your attention before the week finalizes. Below are 3 additions to Tech Charts watchlist that may experience breakouts. These charts will also be included in the weekly update.

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Tech Charts Year in Review with Aksel – May 2020

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Tech Charts Year in Review – Year Three

  • A study on Chart Pattern Reliability with the available sample data over the past year
  • Chart patterns with horizontal boundaries have been more reliable compared with breakouts from chart patterns with diagonal boundaries
  • Long-term trends impact the number of bullish and bearish chart pattern setups and breakout opportunities
  • H&S tops, H&S bottoms and descending triangles have been reliable with breakouts from well-defined horizontal boundaries
  • Developing breakout opportunities
  • Live Q&A
Member Questions
  1. When analyzing charts for possible trading opportunities, do you use good liquidity in the market as a trade filter, and what method do you use to determine good liquidity? 1:00:17
  2. It will be nice if the performance of chart alerts can be tracked in an excel sheet. 1:01:42
  3. How often do you trade personally? Did you trade all of the patterns summarized in the "Phases of market trends" slide? 1:02:19
  4. I understand you don't like to use volume, however in technical-analysis-and-stock-market, Richard talks a lot about high volume on upward breakouts, can you explain why you don't use this at least for breakouts? 1:03:15 (LINK: VOLUME AS A CONFIRMING INDICATOR)
  5. Can you talk about how you place stop losses after entering a position? 1:05:58 (LINKS: Breakout with a pullback – Application of ATR trailing stop-loss and ATR Trailing Stop-Loss – H&S Top)
  6. Do you ever look at charts adjusting for dividends? 1:06:32
  7. The statistics on page 7 - does Aksel include failure signals? Such as H&S failure, cup & handle failure, or even asc. des. triangle failures (breaking out of the diagonal line)? 1:07:11 (LINK: Head and Shoulders Top – Failure)
  8. Why do you ignore wedges? You mentioned this on slide 7; I just wanted to understand your reasons. 1:08:12 (LINK: DIAGONAL BOUNDARIES ARE LESS RELIABLE)
  9. Slide 9 - Can you repeat your MAs for weekly and daily timeframes? 1:10:22
  10. Slide 8 - Can you explain how you set your 'pattern failure' level? 1:10:35
  11. Your charts are mostly weekly - does it mean you disregard shorter timeframe formations? If yes, why? 1:11:35
  12. Your H&S examples are all with horizontal shoulders - what is your view of inclined H&S? 1:12:18
  13. Is it true some stocks follow classical patterns better than others over a long period of time? Hence if we find those names, we should follow them long term even if a chart finished this target/negation? 1:13:06
  14. It would be extremely useful to add to the statistics the average ratio between target and negation levels with respect to the breakout level (sort of profit/loss), per pattern type. 1:14:19
  15. Have you ever used a pullback strategy? It seems quite popular for some traders, what % of traders do you think are doing this? 1:14:34
  16. Do you recommend using different stop strategy in terms of the pattern length? i.e., weekly ATR stop if pattern > 12 month, daily ATR stop if the pattern is 4 - 26 weeks. 1:15:24
  17. Page 20, the symm. triangle, do you usually place negation level at the apex of the triangle because E&M book suggests that's a strong support? 1:16:26
  18. Could you show us a breakdown of BreakOut success/failure statistics by Exchanges (or Countries, currencies)? It is relevant to those who do not trade signals in all exchanges/countries. 1:16:51
  19. Are there national markets that demonstrate less emphasis on chart patterns? i.e., heavier % of "fundamental investors"? 1:17:25
  20. Sometimes, you do not plot the 200MA, is there any particular reason? Besides 200d MA, do you use any other MA? 1:18:19
  21. Are you ever concerned with how extended the minor advance is in a stock prior to the breakout? FDN for example bounced straight from the lower boundary; do we have to be careful of profit-taking? 1:18:53
  22. How do you identify the price for horizontal and diagonal boundaries? 1:19:37
  23. I loved to see the slide of statistics - are there more studies available on the website? (Maybe also compared to different observed timeframes?) 1:19:58
  24. How do you treat spindles crossing the chart boundary during the weekly or daily chart development? Do you use a lower time frame to negate the false breakouts? 1:20:23
  25. In terms of timing, what is the time horizon you usually see breakouts playing out? 1:20:58
  26. How do you balance the initial stop loss positioning between chart pattern boundary and chart negation point to balance the position sizing and the risk as basis points in relation to the market volatility? 1:21:40
  27. Between log scale and linear scale, which one is better? 1:22:14
  28. For double tops-bottoms or H&Ss, is there a limit on the percentage (such as 3%) between highs and lows on double tops-bottoms or between right and left shoulders? 1:23:17
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GLOBAL EQUITY MARKETS – May 23, 2020

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REVIEW

The benchmark for the Global equity markets performance, the iShares MSCI All Country World Index ETF (ACWI.O) is trading below its 200-day moving average that is acting as resistance at 71.7 levels. The ETF recovered 62% of the decline that started in February. Last one month's price action can be identified as a rising channel. Price can remain inside the trend channel. There is a gap opening between 69.2 and 67.8 levels which can be filled during a possible pullback.

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Tech Charts Year in Review with Aksel – Thursday, May 21, 830 am mountain

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Dear Tech Charts Members,

Tech Charts Year in Review. Aksel will compare the before and after of charts shared with Members over the last year. As always, we'll end the webinar with a live Q&A. 

Scheduled for: Thursday, May 21, 2020, at 8:30 am mountain (register below)

Tech Charts Year in Review – Year Three

  • A study on Chart Pattern Reliability with the available sample data over the past year
  • Chart patterns with horizontal boundaries have been more reliable compared with breakouts from chart patterns with diagonal boundaries
  • Long-term trends impact the number of bullish and bearish chart pattern setups and breakout opportunities
  • H&S tops, H&S bottoms and descending triangles have been reliable with breakouts from well-defined horizontal boundaries
  • Developing breakout opportunities
  • Live Q&A
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GLOBAL EQUITY MARKETS – May 16, 2020

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REVIEW

The benchmark for the Global equity markets performance, the iShares MSCI All Country World Index ETF (ACWI.O) is possibly forming a short-term consolidation after its strong rebound from the March lows. The ETF recovered close to 62% of the decline that started in February. Price came close to its 200-day moving average which is now at 71.7 levels. The ETF is in a downtrend below the 200-day average.

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GLOBAL EQUITY MARKETS – May 9, 2020

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REVIEW

The benchmark for the Global equity markets performance, the iShares MSCI All Country World Index ETF (ACWI.O) continued to hold on to its gains after the ETF experienced a setback. The ETF recovered close to 62% of the decline that started in February. Price came close to its 200-day moving average which is now at 71.9 levels. The ETF is in a downtrend below the 200-day average. I continue to monitor this ETF for a possible short-term chart pattern development.

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GLOBAL EQUITY MARKETS – May 2, 2020

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REVIEW

The benchmark for the Global equity markets performance, the iShares MSCI All Country World Index ETF (ACWI.O) experienced a setback after the ETF recovered close to 62% of the decline that started in February. Price came close to its 200-day moving average which is now at 72.1 levels. The ETF is in a downtrend below the 200-day average. The chart is in the process of moving to low volatility conditions. It is looking for a balance between demand and supply. A short-term chart pattern that can take the form of a flag/pennant or symmetrical triangle can offer the low risk long/short opportunity. There is no clear chart pattern development on the daily scale price chart.

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INTERIM UPDATE – April 28, 2020

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After rebounding from the lows many indices continued to remain strong. While some individual equities re-tested and even moved to new lows, many formed higher lows and over the past month possible bullish short-term continuation chart patterns. There are several stocks with the same setups. One important thing to mention, those are short-term chart patterns and are more prone to failure than long-term chart pattern developments. Also many stocks that are forming those short-term consolidations are trading below their 200-day averages. So if we see continuations, at best I will treat them as swing trading opportunities and not for position trading. Below are some of those good looking setups.

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