|
Click dates for prior posts.
| October 2006 | | S | M | T | W | T | F | S | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
| 8 | 9 | 10 | 11 | 12 | 13 | 14 |
| 15 | 16 | 17 | 18 | 19 | 20 | 21 |
| 22 | 23 | 24 | 25 | 26 | 27 | 28 |
| 29 | 30 | 31 | | | | |
[Archives, prior months.]
Search entries:
Give your trading a boost:
FibMaster live workshop
& chat!
Live webinars
lessons & seminars.
Video seminars & lessons.
See what other traders say about FibMaster.
Give a little back:
Give someone a hand.
|
[Previous entry: "EUR nearing critical resistance."] [Main Index] [Next entry: "EUR bullish, JPY bearish."]
10/29/2006 Archived Entry: "Buying bottoms, AZN daily chart."
>Email question from Ross V.
>
>I am interested in starting a long position in AZN. It gapped down now 2 days in a row on heavy volume.
>I chart in OHLC bars, with several indicators; RSI, WM%, MACD, full STO,
>ADX, ChiOsc, Aroon, Force(13), and Acc/Dist.
>My question is, how do I best pick the bottom on this?
>None of the indicators are signaling a bottom yet, not even a change in momentum. I am feeling ready to >buy a few bits of it, because if I wait for the indicators to turn(like an MACD crossover), the price may be >well above where it is now. Ross, Looking at the AZN chart, I would rather short the next rally than buy this dip. Sure there will be a bounce at some point, and it could be profitable for you, but I suspect that a future short is a much better trade. The danger with buying (long) a chart that is gapping down, is that it may be even further down in the near future. And a chart that gaps down may gap beyond your stop-loss too. I know that feeling of wanting to get in because it may be higher soon, but there is a good chance it may be lower soon too. One the of the primary principles of trading is to "preserve your capital". We have to take some risks, but we should employ strategies which put the odds in our favor. With that in mind, I suggest that you should not be the first person to buy this dropping chart. Wait for support to develop first. Yes, you will pay a higher price for this chart if you wait, but you should consider that as the cost of insurance. You will increase your odds of success if you pay a higher price, and you will preserve your capital. Astrazeneca PLC (AZN) has already gapped down though a key support area near $60. The next two important support levels are at $57.50-$58 and $56-$56.50 Attached is a chart showing the support FibLevels (horizontal blue lines). Click here to see the support chart, AZN_061029 Either of those could provide short-term rallies for long scalps. If you must trade long, then look for support to develop first, then buy dips on lower time-frames. If we have a decent rally, there will be some excellent shorting in the future! -Neal (FibMaster).
Next page, continue.
|
