AAPL YHOO TSLA C : It's always your call...

Don't let someone else tell you how to invest your money!

It's always your call...

• It is natural to look for an easy way to start investing.  Or an easy way to continue investing because you are tired of losing money.  What you really need is more knowledge.  More experience.  More time to learn.  And a good teacher.

• I am not saying you shouldn't subscribe to some investing service or some trading room.  All I am saying is that every time you spend your money it should be your decision.  You should know why you are hitting the "submit" button on that order.  You should also know when, and how, you are going to cut your losses if the trade goes bad.  This is not easy people.  All of us struggle with the reality that we made a bad decision.  And what if the trade goes good?  When do you get out??  Sometimes this is an even harder decision.

• If you are invested in AAPL or YHOO you may be wondering what to do now.  If you are not invested in anything but you want to get involved because "everyone else is making tons of money", realize that some people are making money.  But there are definitely some people losing money.  Even in this market which is at all time highs.

• Let me circle back to my opening paragraph for a moment.  More knowledge will come as you read more.  You have to learn to distinguish between facts and opinion.  More experience will come as you make more trades.  But it will likely come with a financial cost.  Unless you are "paper trading".  Let's be honest, paper trading is great when you can walk away from a "paper loss" and start over.  But paper trading SUCKS when you make a huge "paper gain" because you got a trade just right. 

• And about that good teacher.  Good Luck to ya.  There are some traders / investors out there that would make great teachers.  But they aren't accessible to you and me or they want more money every month than is affordable to most.  By the way, there is never a guarantee that you will make money.  And you can't expect one.  This market isn't a place where guarantees work. 

• So why am I rambling instead of showing charts?  The charts are next.  But investing is rarely like going to school and having someone show you exactly what to do.  You have to learn by taking little bits from many sources and putting the bits together to form a cohesive plan.  I hope this blog is one of your bits.

C  -  Citigroup
      It's your call...

This is a daily chart of C

Click the chart for a larger chart of Citigroup

• Citigroup has been in a range (between the two gray horizontal lines) since about March of 2013.  The price did dip below the range once in 2013 and rose above the range once in 2014.  You will need to look at a 2 yr chart to see it clearly.

• What I am trying to show you is two things.  1) The lows have been getting higher & higher since April of 2014.  Notice the green uptrend line that touches the lows.  2) The price just approached the top gray horizontal line and now looks like it is heading lower.  Notice the short red downtrend line that touches the highs. 

• If you want to invest in or trade Citigroup you have a decision to make.  If you think it will go up from here then it needs to stay above the 21 ema (yellow).  If you think it will go down from here then is has to stay below the red downtrend line.  It's your call...

TSLA  -  Tesla Motors Inc

      It's your call...

This is a daily chart of TSLA

Click the chart for a larger chart of Tesla

• Tesla has been following the same uptrend line (UT 1) since mid 2013.  Going long when TSLA is close to UT 1 has been a great investment.  Take a look at a daily chart that includes all of 2013 and you will see what I am talking about.  

• I know there are several lines on this chart so it may seem confusing at first.  But let me explain...  If a trend line doesn't have a UT or DT label then ignore it.  Those are old trend lines that I am not talking about in this post.  I guess I could have removed them but I didn't.  Focus on DT 1, UT 1, and UT 2.  We have already talked about UT 1 and how it has been intact for about 1.5 years.  UT 2 has only been intact for about 3 weeks.  But it is crucial that you realize the price of TSLA is following UT 2 at the moment.  DT 1 was intact for all of September & October.  What is important about DT 1?  The fact that TSLA's price is now above it.

• How do we invest or trade TSLA from here?  If you think it will continue higher then it has to stay above UT 2.  If you think it will go down from here then I guess it has to stay below the gray horizontal line.  

• If you were short while TSLA was following DT 1 then you should have exited that position at the beginning of the week.  If you were waiting on the sidelines for a hint that TSLA was done going down, that hint came at the beginning of the week when the price closed above DT 1.  

If you initiate a trade right here, 

how do you know if you made a bad decision?

• One way is to only allow 3-5% of your money to be lost.  But that is arbitrary and only you can make that decision.  I like the range but if you don't enter a trade at the right time you could loose every time.

• Another way is to use a trend line.  If you feel TSLA or C are following a particular trend line and that trend line is breached, then you should get out of the trade.  What about the percent range?  You would've known how many percentage points you were risking before you entered the trade because you know where you were buying and you knew the price level of the trend line at that point in time.  If you weren't willing to risk that many percentage points then you shouldn't have entered the trade.

• Let's look at C first.  If you go long right here, you have to realize that C could go all the way down to the Uptrend line...  Ouch!!  That is a drop of about $4 from here or 8%.  Not my idea of a good entry.  If you go short right here, you want the price to stay below the red downtrend line.  Which is about $0.60 above Friday's close or 1%.  I can accept that kind of risk.  Either way you have to constantly evaluate your trade.

• Let's look at TSLA.  It you go long right here, the price has to stay above UT 2.  If it crosses below UT 2 you should sell because chances are good it will go to UT 1.  You could buy it back when it gets there.  If you go short right here, I would call you crazy  :)  But seriously, I would wait until the price closes below UT 2.  If it gets that low, watch for a turn back up at UT 1.  If it gets below that, I will short it with you...

Anything can change at anytime!  You have to constantly evaluate your trade.  If it is working, hang in there, adjust your trend line, and be patient.  If the trade is not working, get out of the way!  Don't be patient, don't hang in there, don't adjust your trend line.  You can always try another trade later on down the road if you still have money left because you were disciplined enough to get out of a bad trade...

Trade what you see...  Not what you think, or feel, or hope, ...

The trend is your friend... Until it's not.

Limit Risk & Protect Profits!

Quick Post on YAHOO! ($YHOO)

Everyone is talking about YHOO & AAPL this week.  As you may have noticed, my last couple of posts have focused on the trend lines in weekly charts.  For a change, here is a quick post on an hourly chart of YHOO.

YAHOO!  (YHOO)

Here is an HOURLY chart of YAHOO!



Click the chart for a larger chart of YHOO



• Remember this is only an hourly chart.  Why would I repeat myself?  Because an hourly chart gives very short term signals that may not last very long.  But the trend lines look the same on short term charts and long term charts.  Just remember where your signal came from and you will be ok.

• Inside the shaded box - Notice that YHOO crossed above the red DT line yesterday afternoon.  The opening candle of today tested the red DT line but didn't break it.  That was a good indication that it could be bought.  Small size initial position was prudent.  The opening candle high of today also matched the top of a candle from yesterday afternoon.  So that tells us there is some resistance at $43ish.

• UT 1 has been a good trend for a week now.  I like it as my "line in the sand".  But it is interesting to note that, after yesterday's low, UT 2 began to take shape.  It is well defined at this point and can be used as a "tight stop". 

• Although these are short term signals only to be used for short term trades.  If you want to try one you could go long close to but above UT 2 and use UT 1 or UT 2 as your stop.  If the trade doesn't work out just get out of the way.  If it does work out, you may have a descent winner on your hands.

• Things to look for...  There is resistance at $43ish so expect some turbulence there.  The price of YHOO has to stay above UT 1 to stay in the trade.  Once YHOO gets above $43, I would expect it to go to $44ish.  There may be some turbulence there too as it would match the high from a couple days ago.

Trade What You See...  Not what you think, or feel, or hope, or ...

The Trend Is Your Friend... Until Its Not

Protect Profits & Limit Risk

Z, WFM, TRIP AMZN : Selling Short & Buying Puts

Let me begin this post by saying I am not making a call on the market.  Nor am I saying that any of these companies are beginning a long downturn.  But they might be...

I will also say that many investors seem to feel like this rising market is getting long in the tooth and many are asking for a small correction for overall market health.  Some are predicting large corrections and some are predicting doom & gloom.  If any of these scenarios come to pass, stocks will go lower.  Weakest stocks will fall the fastest.  Weakest stocks during a correction are typically weak stocks in a rising market.  This post talks about 3 weakening stocks in a rising market.

All charts are weekly charts so they do take a longer time to show changes.  Take that any way you want.  Technically, these stocks currently  look like they are going lower from here.



Zillow (Z)

Here is a Weekly Chart of Zillow

Click the chart for a larger chart of Zillow

When I draw my trend lines on my chart, I see that the last candle closed below the uptrend line (UT 2) that started in May and has held ever since.  If I am right about Zillow, next week's candle has to close below this week's candle.  If you want to try a short position or puts, you can start your position now and keep it as long as Z is below 140ish.  Please use a stop of $140ish or $144ish to protect yourself.



Whole Foods Market  (WFM)

Here is a Weekly Chart of WFM

Click the chart for a larger chart of Whole Foods Market

 

In October of 2010, WFM began an uptrend line that lasted until April of this year.  For the last year, since April of 2013, WFM followed an accelerated uptrend line which ended in November of 2013. 

If I were long WFM, I would like to think that I would have sold some of my position in November of 2013 when the accelerated downtrend (UT 2) ended.  Now I will admit that I may have lost some money when the price went through the longer term downtrend line (UT 1) because I would have been looking for a bounce that didn't materialize.  Hopefully I would have used a tight stop and got out quickly.

Once the price went through UT 1, it would only make sense to start thinking about "Puts & Selling Short".  But would I have done it?  I honestly don't know.  This is really the whole point of me writing this blog.  I guess I am trying to convince myself that it's just as acceptable to try Puts & Selling Short as it is buying calls & going long.

I know the rules!  I really do!  Take a look at the downtrend line that has developed since UT 2 broke.  All you have to do is realize that WFM is not going meaningfully higher until it is able to cross above DT 1.  So buy puts or sell short when the price is close to DT 1 and use a tight stop.  I would go a step further and say that $42.50ish was resistance in mid June and may very well be resistance again the next time the price gets there.  So I would say it would be prudent to try puts or selling short around $42.50ish and use a stop just above DT 1.  It is interesting to me to realize that in about 4 weeks, the horizontal resistance & DT 1 will both be at $42.50ish.  That would give me two reasons to try puts or sell short.  I consider myself an optimist.  It just seems weird to bet that a stock is going down.  But the reality is I also feel I am smart enough to recognize the signs of a stock that may go down.  Now I just have to pull the trigger and build some confidence. 




Trip Advisor  (TRIP)

Here is a Weekly Chart of TRIP

Click chart for a larger chart of Trip Advisor

TRIP began UT 1 in November of 2012.  The price broke UT 1 for the first time in February of 2014, the second time in April of 2014, and the third time last month.  Each time the price dropped below UT 1, it came back up above it.  Will this time be different??

Here is what I see in the chart.  TRIP put in a double top from March to July of this year.  Also UT 1and DT 1 crossed and the price followed the downtrend line.  At least that is what has happened so far. 

Last week's candle closed lower than the previous week's.  And last weeks candle didn't get even half way back up into the previous week's candle ($101.74 is half of the previous week's range).  Last week's high was $100.23. 

If I were going to start a short position through puts or selling short, I would use $101.75ish as my first stop.  If I needed another stop I would use DT 1 ($104ish next week). 

If you think TRIP is just "having trouble with UT 1" and will continue to go higher then here is an investing / trading plan for you.  First thing you need to do is draw an uptrend line from the lows in April to the lows in August.  You can call it UT 2 if you would like.  But in my world, UT (x+1) is always above UT x.  You will need to open a math book if that last sentence freaked you out  :)

Now you should notice that last week's low was right at your new trend line.  It held so that is good.  In the coming weeks, TRIP has to stay above your new trend line.  If it does, the real test will be when your new trend line meets DT 1.  Whatever happens there should be your insight into what may come next. 

The cool thing about investing is that no one really knows the future.  So when you look at a chart and say, "I think it is going up/down from here", you have a 50/50 chance of being right.  Those are great odds.  Trade what you see.  It is just as correct, at the moment, as what anyone else sees.  Time will ultimately prove you right or wrong.

The key is to give your thesis some parameters.  You should pick an event or $ level that proves you are wrong.  If that event or $ level occurs, then admit you are wrong and get out of the way.  You can decide to stay away for a little while and then try again or you can choose to invest or trade with the price action that is actually taking place.  If you struggle with this aspect of trading then "join the club".  We all struggle with this...



Amazon  (AMZN)


All the financial media is talking about Alibaba (BABA).  Fact is Alibaba is bigger than Amazon & Ebay put together.  Also, Alibaba has profits and Amazon doesn't.  Which stock would you invest in?

I know that I tend to "raise money" to get into a better investment.  Do big investors do that too?  I think they do.  If I am right, that may explain why AMZN has been dropping since the beginning of this year.  Then again, maybe there is no correlation at all.

Although AMZN has been a great investment since 2009, is AMZN going to continue to be a great investment now that BABA is almost available to own.  Hedge funds like to choose one stock to play to the upside and another to play to the downside.  Could that combo be AMZN (down) and BABA (up)?

AMZN is currently between an uptrend line and a downtrend line.  The downtrend line is at about $355ish for next week.  If AMZN is going down it shouldn't get above there.  The closest uptrend line is, although very short, is about $340ish.  The next closest uptrend line is in the low $300s.  If it gets below there, the next uptrend line is in the high $200s.  There is some potential gain right there if you are short or buying puts...

What if AMZN goes up through the downtrend line?  Well then you should be playing it long.  There is potential resistance at $365ish, then at $380ish, then at all time highs of $405 to $410.  There is some potential gain right there if you are long or buying calls...

__________________

 

 

As you can tell by my scenarios, I am not making an up or down call.  I don't know the future.  All anyone can do is invest or trade based on what they see. 

Trade what you see... Not what you think, or feel, or hope, or ...

The trend is your friend... Until its not

Limit risk & protect profits

Twitter Inc (TWTR) : More Perspective with Fibonacci

Twitter Inc  (TWTR)
 

This is a continuation of yesterday's post titled "What Happened to TWTR ??".

 
 

• Let's talk quickly about Leonardo Fibonacci.  He is historically credited with giving society The Fibonacci Number series.  There is some drama associated with this credit but let's just go with it.  The beginning of the list of Fibonacci Numbers is 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, ...  If you want more info on Fibonacci Numbers just Google it.  There is more info out there than you want to know. 

 

How do Fibonacci Numbers apply to Investing?

 

• We all know that stocks go up and down.  If you like this blog you probably agree that stocks tend to rise and fall in trends.  What you may not have realized is that after a stock price rises to a peak, it may then fall to a Fibonacci Retracement level.  There are investors out there who have spent a lot of time on this.  Let's just accept it as another form of technical analysis. 

 
If you are curious how the Fibonacci Retracement levels are found then here you go.   If not just scroll down to More TWTR Perspective with Fibonacci Retracement.

0.618 or 61.8% :  If you divide any (large) Fibonacci Number by the one after it, your answer will be close to 0.618. 
 
0.382 or 38.2% :  If you divide any (large) Fibonacci Number by the 2nd number after it, your answer will be close to 0.382
 
0.236 or 23.6% :  If you divide any (large) Fibonacci Number by the 3rd number after it, your answer will be close to 0.236
 
** There are more retracement & extension levels available on your Fibonacci Retracement tool.  Some of those values can be found with similar rules.  Other values like the 50% retracement level are not actually Fibonacci Retracement levels.  These non-fib levels were added by investors over the years because they are relevant in investing.
 

                             

 

More TWTR Perspective with Fibonacci Retracement

 

• Let's focus on the word retracement.  We all know that retracement means a reversal of direction.  I think we would all like to know how much of the rise in stock price (uptrend) the reversal will take back.  There isn't anyone out there that knows the future before it happens.  So take all those price predictions you have read and realize that they are no more than someone's opinion.  You can also take this Fibonacci Retracement stuff and realize that it is no more than a potential guideline. 

 

• So how much of a rise in stock price will the reversal take back?  Maybe this reversal will take back 23.6 % of the increase.  Maybe it will take back 38.2% of the increase.  Maybe it will take back 50% or 61.8% of the retracement.  We don't know the answer to the question but for some reason, these retracement levels are quite commonly places where the reversal ends and a new rise in the stock price begins.

 
 

Here is a Daily chart of TWTR with Fibonacci Retracement levels



Click here for a larger chart of TWTR with Fibonacci Retracement Levels
** Typo : 28.2% retracement level should be 38.2% **



• Fibonacci Retracement levels have merit weather you are long or short.   In the case of TWTR we can build some perspective into Friday's reversal.  We may even be able to use Fibonacci Retracement levels to decide what to do next...

 

• Let's all agree that Friday's reversal felt POTENT.  It may have even felt painful depending on where you went long.  But in terms of Fibonacci Retracement, the reversal didn't even take back 38.2% of the uptrend.  This could get a lot worse...  If you are long the stock you should consider getting out of the way of this reversal.  What if the reversal eventually takes back 61.8% or more of the uptrend.  Now that would be painful!

 

• If you want to be long this stock then look for a new uptrend to begin somewhere around one of the Fibonacci Retracement levels.   The next lower retracement level from here is the 38.2% retracement at about $61.  If TWTR bounces around there then go long again.  But wait for the bounce.  Don't assume it's going to happen.  If the stock continues to fall through the 38.2% retracement then start watching the 50% level at about $57.  Continue this method until an uptrend actually begins.   You can, and should in my opinion, also look for a new uptrend to begin by using trend lines like the red & green ones on the chart.  Yesterday's post "What happened to TWTR ??" should help with the trend line method.  Remember, Fibonacci Retracement is nothing more than a potential guide.  So use it as such.

• I wouldn't advise anyone to stay long indefinitely and see what happens.  The thing everyone forgets is that you can always get out of a stock and then get back into it at a better time.  If a better time presents itself.  I am not a big proponent of averaging down either.  If you get long when a downtrend becomes an uptrend and you use a stop loss incase you were wrong on your entry, then you won't need to average down.  This method works on all timeframes. So I am not just talking to the "Fast Money" crowd. 

 

• Let's say that TWTR goes down to about the 50% retracement level and then turns up to begin a new uptrend.  What is the next area where you might expect a little turmoil?  I would say the next higher retracement level of 38.2% or around $61.  If it closes above the $61 area then look for it to get to the 23.6% retracement level or around $66.  Are you seeing how this works?  What if the price gets back to the All Time High (ATH) of about $75.  Then what?  Are there any guidelines for how far TWTR may run before another reversal begins?  You bet.  I am not going to get into it now but that would be called a Fibonacci Extension.  Google it if you are interested. 

 

• If you want to be (or already are) short this stock then realize that your max profits may be obtained when the stock price reaches these same Fibonacci Retracement levels.  It would be prudent to lighten up on your short position at the 38.2% area for instance because that is one potential level where a new uptrend may begin.  If the stock price closes below a retracement level then you should be safe adding to your short again.  So if the stock price closes below the 38.2% level or $61 then increase your short position again if you want.  You could then see if TWTR gets down to the 50% retracement level of about $57.  And so on.  You could do this all the way down to the eventual spot where the new uptrend starts.  I don't expect that TWTR is going out of business so I do expect that there will be a new uptrend at some point.  We all know the uptrend was a great long trade.  But it is yet to be seen how good of a trade this downtrend will be for the shorts.  Be careful.

 
 
 

Trade What You See...Not What You Think, Or Feel, Or Hope, Or ...
The Trend Is Your Friend...Until It's Not
Limit Risk & Protect Your Profits

Apple Inc (AAPL)

I am going to start this post by giving you a longer view of Apple Inc. 

This chart begins late in 2012 when a share of AAPL was going for about $700.  This chart ends at present day. 

This is a Weekly chart of AAPL

Click for a larger chart of AAPL



• I find that many of us forget to look at the big picture.  Instead we get caught up in the smaller one and miss out on some details.  This chart of AAPL shows me some pretty handy info yet it is clean, simple to read, and lends itself to interpretation. 

What's on the chart? 

 

• Let's start with the long red downtrend lines (DT).  They show the decline from $700 to $400.  All three of them were drawn during the downtrend.  One of them follows the initial downtrend from $700.  The middle one starts at $700 and touches the top of an uptrend late in the downtrend.  The last one is similar to the middle one as it too starts at $700 and touches after an uptrend occurs.  Why draw these lines?  I was looking for the bottom...

• The smaller red DT lines are places you could have gotten into AAPL after the run back up began.  Do you ever hear people saying it's too late to get in?  They might be right.  But when you can draw a short downtrend line and the price breaks above, it is probably safe to try going long.  Don't worry that you didn't catch the uptrend at the Double Bottom.  Most people didn't.  It's ok to begin an investment after the beginning of a trend.  Just plan your exit so you limit your losses if the investment doesn't work out.  There is more detail about places to get into AAPL later in this post.

• The green line labeled "Double Bottom??" is exactly what it seems.  I was asking myself if this could be a double bottom.  If it was I knew there was a chance it was a sign that AAPL had seen the lows and it would be a good time to go long the stock.  Looking back it was a great time to go long.  That was about $150 per share ago...

• The green uptrend line labeled UT 1 shows the trend that AAPL has been following since that double bottom.  UT 2 is an accelerated trend that the price has been following since September 20, 1013.  As long as UT 1 holds, I will be long AAPL...

• The horizontal dashed lines are Fibonacci Retracement lines.  You don't have to have a Math degree to understand how to use them and what they mean.  But if you are in the Math degree club you probably know a little more about Mr. Fibonacci than you care to :-)  Anyway, I find it very interesting that AAPL came back to the 50% retracement line before turning up again.  It is common for downtrends to become uptrends around retracement lines.  The big question is always which one.

• My simple interpretation of the weekly chart is that AAPL is in a strong uptrend.  There is even an accelerated uptrend in place.  If you want to go long (or add to your long) you should try to do it after a bounce off an uptrend line or when a downtrend line breaks.

I showed you the Weekly chart of AAPL so I can show you the Daily chart. 

This chart starts at the end of the double bottom and ends at present day. 

 

 

This is a Daily chart of AAPL

• The daily chart is a little more erratic than the weekly but that is expected.  One thing to focus on though is that the Weekly and the Daily charts both show uptrends.  That is a pretty good indication that you are safe being long the stock. 

• There are many places you could have gotten into this stock after the double bottom.  The shaded green circles show you some of them.  All those shaded green circles show a downtrend line being broken.  And if you notice, they all lead to higher prices.  If UT 1 & UT 2 continue, there will be many more opportunities just like these. 

• Notice that I have drawn a red downtrend line beginning at the high on Thursday.  I drew it all the way down to UT 1 because it could take that long for the price to break the DT line if it is going to.  Based on what is happening with AAPL at the moment, I don't expect the price to even get to UT 2 before it breaks the red DT line.  But that is my expectation and it may have absolutely nothing to do with reality. 

• So how do I play this from here.  Well, first you should know that I took some profits on Friday.  The stock was following a VERY steep trend higher for 7 days.  Friday's price action fell below that steep trend so I took some profits.  The next place I will take profits is $545ish.  You can draw an UT line starting on 11/21 and touching the bottom of the next three candles.  It will be at $545ish on Monday and $547ish on Tuesday.  On Wednesday it will be at $550ish AND it will intersect the red DT line.  If apple breaks the DT line and stays above the UT line starting on 11/21, then we have a new and more accelerated UT line that has been formed.  These developments would be very positive for long investors.  If none of this happens then look for a bounce off of UT 2 or UT 1.  If it goes below UT 1 then then look for lower prices.  By the way, UT 1 is about $55 below the current share price.  That is about a 10% drop.  Do you really want to just jump in blindly and "hope" that the price doesn't go down 10% or more?  I sure hope not.

Base your investment decisions on the chart.  Trade (invest) what you see.  Not what you think, or feel, or hope, or ...    

Limit Risk & Protect Your Profits

 

Helping A Fellow Investor

First & foremost I appreciate simplicity.  I appreciate cleanliness.  I appreciate methods that work on a regular basis.  I understand that no method is pristine and most methods require some finesse.  The chart below shows an example of that finesse. 

Back in late 2010, ITUB began the downtrend that has lasted for 3 years now.  If you are investing in this stock you have to realize that the highs and lows are getting lower as time goes by.  The easy way to play this stock it to go short.  If you are going long, you are trying to make money the hard way.  Not that it can't be done but it will take longer and it will work less often. 

Look at how quickly this stock drops.  Look at the drops in July of 2011, April of 2012, and June of 2013.   Also look at the long red downtrend lines.  It makes sense that if a stock is in a downtrend, it will fall faster than it will rise. 

This is a Weekly chart of ITUB 

ITUB hit a high above the lower red downtrend line.  So I drew another downtrend line that starts back in November of 2010 and hits this new top.  This is the finesse I spoke of earlier.  But let's face it.  The 3 year old pattern continues as expected.  I drew a green uptrend line to show the last uptrend and where the price crosses below it.  I also drew a new red downtrend line.  The length of the line is arbitrary.  I have no idea how long the downtrend will last.  The angle of the line seems to be accurate though.  Time will tell.  I may need a bit more finesse along the way. 

I will say that I notice something I didn't put on the chart.  It has to do with the lows from mid 2012 and mid 2013.  Do you notice that these lows are close to the same level?  This may be a sign that $11.50ish is a level of support.

Now let's look at BBD.  Almost everything I said about ITUB holds for this chart too.  What are the differences?  Well I haven't needed any finesse yet.  And I am not willing to say that I see a level of support yet.  Here is a coincidence I just noticed.  It looks like the downtrend in both of these stocks started at almost the same time. 

This is a Weekly chart of BBD

I prepared one more chart to try to help you out.  That chart is of PANW.   This is a newer issue and therefor we have less history to go by.  That typically means there is a lot more finesse required. 

I noted the Day 1 high & low on the chart.  These are "mentally" important levels for an IPO.  You have to respect them.  I also drew a red downtrend line that started in September 2012.  The only other line on the chart is a green uptrend line that is much more of a horizontal support line in my mind.  I think this green line may show a double bottom that could lead to a change in trend. 

Friday's candle pierced the red downtrend line with greater than average volume.  It also closed above the red downtrend line.  If you want to go long this stock you may have good reason to do so.  Keep watching and let the story unfold. 

This is a Daily chart of PANW

Sorry this chart is so small but I can't get Blogger to let me change it's size.

You can click on it for a larger pic.

If there is any way I can help my fellow investor I am ready (as long as time permits).  I don't claim to be anything more than an investor who uses trend lines.  I am not the best investor out there.  I am not the most knowledgeable investor out there.  But I am someone who isn't afraid to spend some time helping out a total stranger.  I hope this post helps you. 

Timeframes Matter...

Charts Can Be Deceiving

I hope to get you to pay attention to other TIME FRAMES along with the one being presented.  You should look at the daily, weekly, and monthly charts before making an investment in any stock.  Then follow the trend.  Until it breaks.

 

 

 

I know, I know.  You are thinking that a chart is based on facts so there is no way it can lie.  Well, I don't agree.  What if the TIME FRAME used to create the chart doesn't give you enough of the history to really see the details?

I am about to show you a daily chart of JCP.  This daily chart looks like things are getting better for JCP's stock.  Maybe they are.  The daily candles have already crossed over a down trend (DT) line and are heading for DT 2.  They are actually following an up trend (UT) line very nicely. 

Let me just say that there are some reasons to "believe" that JCP's stock has made a turn for the better.  But I don't invest on what I believe.  I invest (trade) on what I see on the chart.  But which chart am I looking at?

Remember that the DT lines on the chart are places we should look for a potential change in direction.  Sooooo, be on the lookout.  Follow the up trend line until it breaks.  The one I am currently following is the green UT line.  And it's working.

 

This is a Daily chart of JCP

Now look at the weekly chart of JCP.  A larger picture of the stock's history tells a different story.  The weekly chart tells me that JCP is just going lower and lower.  It doesn't look like a turn around at all.  For me, I would not be willing to say that JCP is trying to turn around until the stock closes above DT 2.  When JCP closes above DT1, it will be safe to tell your friends & family to consider buying the stock in their retirement plans.  Right now though, DT 1 is a long way off.  So let's keep this between us active investors for now. 

Will there be opportunities to make money along the way?  Oh yes!  How about if the stock just follows DT 2 lower?  Sure, we all know there is a way to profit from a move lower.  Remember to trade what you see.  Not what you think, or feel, or hope, or ...

This is a Weekly chart of JCP

 

Do you see how some investors can be bullish while others are bearish?  It may be as simple as which TIME FRAME they are using to form their opinion. If I was recommending an investment to you and I only showed you the daily chart you might agree JCP looks bullish.  Looking at the weekly chart should damper your enthusiasm a bit. 

 

As I said earlier, I hope to get you to pay attention to other TIME FRAMES along with the one being presented.  You should look at the daily, weekly, and monthly charts before making an investment in any stock.  Then follow the trend.  Until it breaks.

Happy Thanksgiving :-)

As part of the family sleeps in and another part runs our local Turkey Trot, I spend my time looking at charts and reading other people's comments.  You have to study investing if you want to be a successful investor.  I have learned over the years that you learn a lot more when your mouth is closed...  This is a hard lesson for me as I was born with the "gift of gab".

 

This post is short & sweet so I can get ready for a day full of family & friends.  I hope you have an amazing day today.  I hope you have thankfulness in your heart and that you show it as you walk through your day.

 

Here are a few charts to ponder as you eat your turkey & ham and pie...

This is a Daily chart of TSLA

Click on the chart to see a larger one

The notes on the chart say most of what I want to say about TSLA.  Remember that the company is now under investigation for the fires.  If the investigation goes well then it's good news and the stock probably jumps.  If it's bad news then the stock probably falls.  This "event risk" is not for the faint of heart.  If you invest any money in this company right now, be sure you realize that you may be buying a lottery ticket.  What usually happens to the money you spend on the lottery?  You lose it...

This is a Daily chart of CZR

Click on the chart to see a larger one

CZR has been cruising for a while now.  Will it continue?  No one knows.  But I will say there is some added excitement about the gaming sector as internet gaming with real money has begun...

This is a Daily chart of VJET

Click on the chart to see a larger one

 



 You have to be very careful with new issues (IPO's).  They don't have a history so the stock price can go anywhere.   All trend lines are short and therefor not very reliable.  I find it interesting that the stock price is very close to the vertex.  It will show us a direction very soon.

 

Twitter Inc (TWTR)

Trade what you see.  Not what you think or feel or hope or . . .

• What I see on the chart below is a newly issued stock that is currently trading below the first trading day's range.  I also see that the current price is below the down trend line (DT) and just above the all time low line.  You should be able to see a triangle on the chart.  Horizontal bottom, red hypotenuse, imaginary left side.  This kind of triangle makes me feel like the stock price is being pushed down further and further and will eventually go below the horizontal base.  But that may or may not be the case...

• Let's agree that the price of TWTR has to either break above the right vertex of the triangle or below it.  Agreed?  Ok then.  Whatever it does may be a sign of things to come.  If it closes below the horizontal base, then I would look for lower prices for the moment.  If it closes above the hypotenuse, then I would look for higher prices in the near future.  Could both of these expectations be wrong?  Yes.  The price could go sideways.

• Notice that two days ago the stock closed below the horizontal base.  I took that as a bearish sign.  I expect that is telling me lower prices are coming.  But yesterday the stock closed above the horizontal trend.  Now I am not sure if my expectation is correct.  I am still leaning towards lower prices in the near future but how should I invest real money?

• My best advice would be to wait and see what happens.  Maybe the best thing to do is not invest in this stock at this time.  Now there is a novel idea.  There is always risk involved in investing so you have to decide how much risk you are comfortable with.  If you decide you want to invest now then maybe use 25% - 33% of the money you want to eventually commit to a TWTR investment or trade.  Start small and wait for the chart to give more definitive information. 

So there are three options : higher, lower, or sideways.  The chart could give us a better idea by the end of the day. 

This is a Daily chart of TWTR

 

Yahoo! Inc (YHOO)

• Did you have any idea the chart of YHOO looked this good?  I sure wish I was invested in it since the beginning of the trend...   But the reality is I didn't see the beginning of the trend.

• Every circle (elipse) is the beginning of a trend or a confirmation of the trend.  It is also a test of weather or not the trend will continue.  It can be a great place to get long the stock (if the trend continues).  It can be a great place to get short the stock (if the trend breaks). 

• UT 1 is the longest and flattest "Up Trend" line.  UT 2 is the next longest but steeper "Up Trend" line.  IMHO, it is always a good sign when a UT 2 is created.  It shows increased strength and a faster advance in the share price.  Just to be brutally honest, there are many trend lines not shown on the chart.  But I like to focus on what I feel is important at the moment.  I also like a clean chart. 

• I have come to the realization that you can't always catch the beginning of the trend because you can't watch all stocks all the time.  A battle I used to have with myself was the "Is it too late to get in?" battle.  This chart and many others will reaffirm the answer.  Which is "No one knows."  If you find a trend that is working then maybe try jumping in.  The trend might just last for another year.  Or more  :)   Or the trend might break within a few days.

This is a Daily chart of YHOO

Apple Inc (AAPL)

 

 

 

• First let me say welcome to the new Blog.  This has been a long time coming.

 

• This first post is more of a test to see how things go with the blog but I figured I would also give you an idea of what you will find here.  And Apple is as fine a chart to start off with as any.

 

• As you may know, AAPL reached a high of about $700 and then began a $300 decline to ultimately reach about $400.  Everyone seems to have an "opinion" about this stock but you probably won't catch me giving one.  My goal hear is to share the things I see in the chart.  Primarily the trends and retracements.  I typically make comments about the chart but I try not to give opinions.  After all, I invest based on what I see happening.  Not what I think or hope will happen.

 

This is a Daily Chart of AAPL