online stock trading, online trading

by Ken Matsumoto - May 15, 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 begins in a trading range which started back in late 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
• Market experienced a series of pullbacks since the breakout, finding support at the updtrending MAs
• Market traded down today, closing below its 5 day EMA ( B ) changing its short term bias to a downtrend.  Prices also closed well below the 20 day EMA, raising a red flag to the current daily uptrend
• Stochastics have crossed down into a downtrend ( C ).  This is a short term bearish sign

Hourly Chart:    

• MAs crossed up ( D )from the lower end of the trading range marking the start of an hourly trend to new multi-year highs.
• Market went on to surge to new multi-year highs at point ( E )
• Market followed the breakout with a sideways range above the 20 EMA
• Market fell decisively near multi-year highs causing the 20 EMA to cross down below the 50 EMA ( F ).  The lack of follow through and subsequent change in hourly trend is characteristic of a  false breakout.  Market trend today was a continuation of the overall Hourly downtrend

5 Minute Chart: 

• Intraday market continued with its smooth trend under the downtrending MAs.  Note how the 20 EMA remained below the 50 EMA, thereby keeping the downtrend in tact

Assessment:

The longer term trend is up with the 20 EMA up above the 50 EMA on the Daily chart.  We do note a warning sign with prices closing below the 20 day EMA shortly after making new multi-year highs.  We will continue to watch prices around the 20 EMA for clues on the sustainability of the current daily utprend.

The short term trend is bearish with the 20 hour EMA below the 50 hour EMA.  This is confirmed with the short term factors from the Daily chart with prices closing below the 5 day EMA and stochastics in a downtrend.  We will continue to monitor these factors for any signs of a change in trend.

We still have conflicting signals between short term and long term trends. Due to bearish signals coming from the Hourly chart we will keep our trading conservative while looking for opportunity on 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.