online stock trading, online trading

by Ken Matsumoto - Apr 9, 2006
Swing Trading Strategies for the full or part-time day trader.
Swing Trading is the art of capturing profits in trending stocks in a relatively short amount of time.

Notes to Charts:
              
Daily Chart:

• This Daily chart here defines the trading range the market which started back in November 2004
• MAs went into an uptrend at ( A ) with the MA crossover up.  This marked the start of the uptrend which ultimately lead to new multi-year highs
• Recent pullback in the market was supported right at the MAs ( B ). 
• 20 EMA crossed below the 50 EMA, representing a Daily Chart downtrend at point ( C ). 
• Market EMAs (20 and 50 EMA) have crossed up, putting the Daily chart back into an uptrend ( D )
• Market reversed the first trading day in January with a surge off of its 50 day EMA, to keep the uptrend in tact
• After a market top in Mid January, market has pulled back to the uptrending MAs in two waves.  Recent market action has several bullish green candles surging above the MAs.  We will watch the year highs carefully for signs of a continuation of the current uptrend
• Market pulled back to close below its 5 day EMA ( E ) changing its short term bias to a downtrend.  We will be keeping a close watch on the recent test of the 20 day EMA for clues on the sustainability of the current Daily uptrend
• Stochastics have turned down under the overbought 80 line ( F ).  Stochastics trend still considered bearish

Hourly Chart:    

• Market quickly moved to the top end of the recent range and has MAs in an uptrend in early January
• After a few days of trading at the 20 hour EMA, market fell to close below all the MAs.  MAs crossed over down into a new Hourly Downtrend with the 20 EMA below the 50 EMA ( G ) .  
• The Double bottom ( H ) was confirmed after the MA crossover up ( I ), indicating a new Hourly uptrend
• Soon after the new Hourly uptrend, MAs did a crossover down at point ( J ), indicating a sideways range as noted by the frequent MA crossover 
• Market returned to a uptrend  after a few days of sideways trading with crossover up ( K )
• After holding a nice trend above the MAs, market pierced through to new multi-year highs ( P ).  However, subsequent market action is signaling a possible false breakout with the pullback into the trading range. 
• After two attempts at the resistance area, market has pulled back causing an MA crossover down ( M ), confirming a failed breakout attempt
• After a few trading days of consolidation in the middle of the recent trading range, market has surged ahead to change the MAs into an uptend with a crossover up ( N ).
• Market went on to surge to new multi-year highs at point ( O )
• After a consolidation to the 20 hour EMA, market surged ahead to new Multi-year highs ( P ) but quickly fell below the MAs.  This marked the start of a sideways trading range
• After a early morning surge to new Multi-Year highs, the market plunged down to the lower end of the recent trading range for a very bearish sign.  MAs are now in a downtrend with the 20 EMA crossing below the 50 EMA ( Q )

5 Minute Chart: 

• Intraday market went into a downtrend with a crossover down ( R ).  Note the smooth trend under the MAs that followed

Assessment:

The longer term trend is up with the 20 EMA up above the 50 EMA on the Daily chart.  We do note a potentially bearish sign with the market reversing off of intraday Multi-Year highs and closing below the 20 day EMA.  We will continue to watch market action around the 20 EMA closely for clues as to the sustainability of the current Daily uptrend.

The short term trend is now bearish with the 20 Hour EMA crossing down below the 50 Hour EMA.  This is confirmed by the short term factors on the Daily chart with prices closing below the 5 day EMA and stoch in a downtrend.  We will watch these factors closely for any changes in the current trend.

We now have conflicting signals between short term and long term trends. With the bearish reversal coming from Hourly charts, we will continue with a bias to the short side of the market.

These charts are here to help you get a visual picture of where we stand in the market from a broad to a very detailed perspective. Recognize where we are and what kind of trend we are in, rather than trying to predict market direction.