So You Want To GoPro...

GoPro Inc  (GPRO)

 

If you want to read my previous post on GPRO click here

 

 

This is a DAILY chart of GPRO - Moving Averages Only

Click the chart for a larger chart of GPRO

• Let me start this post by reminding everyone that GPRO is still a "new issue".  We don't have much history to rely on.  But we are going to run with what we have.  Remember you can always look at an hourly chart too if that makes you feel better.

 
GPRO has been on a tear for the last 4 days.  Although I missed the initial trigger for this latest move, lets look at a couple things that are pointing at a potentially positive longer term story.
 
The first things I want to focus on are pullback levels.  The first time GPRO corrected, it came all the way back to about $36.  The second time it corrected, it came back to about $38.  Pullbacks are constructive in a stock.  Pullbacks to higher levels is an indication that big time traders & investors see value at a higher price than they used to.  So does this mean GPRO will pull back to an even higher level the next time it pulls back?  Maybe  :)
 
The second thing I want to focus on is the moving averages.  I like to pay close attention to the 8, 21, & 50 day ema's.  The 8 should be above the 21 and the 21 should be above the 50.  You can see the 8 was above the 21 until there were a couple days of decline in the stock price.  Now the 8 is trying to get above the 21 again with the recent positive price action.  If the 8 does go above the 21, you could say GPRO is beginning to act like other uptrending stocks.  You might feel like GPRO has run too far too fast.  And you may be right.  But if the 8 day ema gets above & stays above the 21 day ema then GPRO is a good long going forward.
 
 
 

I want to be a TECHNICIAN when I grow up...

 

 

This is a DAILY chart of GPRO - Trend Lines Included

Click the chart for a larger chart of GPRO

** I just noticed a "UT 2" note on the bottom left corner of the chart.  Please ignore it **

• If you are not a "Linear Trader" or "Linear Investor" as I am you may feel overwhelmed by what you see on the above chart.  But give me a few minutes and I will explain it to you.

 
Let's start with the gray horizontal lines.  You may have to look at the hourly chart to see where some of these came from but they are all levels I deemed important early on.  For instance, if you look at the candle representing the first day of trading you will notice I have a horizontal line at the top and bottom of the candle.  I believe the first day's trading range is important so I marked the top & bottom with horizontal lines.  All the horizontal lines have significance to me.  They are not arbitrary and most were created in the first week of GPRO's life. 
 
The horizontal lines are potential support & resistance levels.  If you read my previous post (the link is at the top of this post) you will see that I talked about these levels and how they might help us in the future.  It turns out that $38ish was a very important level recently.  Before that was the $36 level.  I didn't see the $36 level and therefor don't have a horizontal line for it.  $38ish is the best horizontal support we have at this point.  Why?  Because GPRO came back to $38ish twice and has turned higher both times.  I would say $45ish is the best resistance we have so far.  Why?  Look at how many times GPRO has touched the $45ish line and then immediately turned lower.  Big time traders & investors are not convinced that GPRO is worth $45.  So when it gets there they sell it.  At some point this will change.
 
What about the shaded box?  What is that?  I said in my previous post that GPRO has lived in the $41 to $45 range for most of it's life.  I am still willing to say that.  So if you want a pretty high probability trade you can buy shares at $41 (or $38 if it gets that low) and sell them at $45.  that's a 10% move that took about 10 days last time it happened.  We are on that same road again only it started at $38.  If you are long now you have to look for a change in direction around $45.  More precisely, hold your long position as long as the closing price stays above UT 2.  Once the price breaks the UT 2 trend line you have to prepare for lower prices.  If I was going to take a guess I would guess that this might happen around the top of the shaded box.
 

• Let's talk about UT 1, DT 1 & UT 2...  For me, these lines are guides.  They help me decide what may be coming.  But they are only guides.  They are not "tomorrow's newspaper today". 

 
UT 1 is an uptrend line that starts at the low of day one and touches the most recent lows from last week.  I use this line as my ultimate stop or line in the sand.  If I am long GPRO I will sell all remaining shares if the price closes below this line.  I say all remaining because I always look for ways to limit my losses & keep most of my gains.  In other words, I should have sold some or most of my shares before the price dropped to UT 1. 
 
DT 1 is a downtrend line that starts at the highest high and then touches the next lowest high.  I use this line in two ways.  I see it as potential resistance, a place where the stock may turn lower.  But I also see it as an area of momentum once the price closes above that line.  If everyone thinks GPRO will turn lower at DT 1 and it actually goes right on through to even higher prices, some big investors & traders are going to jump in for the next leg higher.  That jumping in will increase the price even more.  And that's a good thing if you are long.
 
UT 2 is an uptrend line that gives me clues about the shorter term.  If I was lucky enough, or good enough, to get in between $38 and $41 I don't want to let the market take away my profits.  So I use UT 2 as a sign that the stock may rest.  When GPRO closes below UT 2 I would sell some of my stock.  Then I will wait to see if GPRO bounces off UT 1 or maybe closes below it.  Then I would buy or sell accordingly. 
 
 
 

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

 
 
 

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. 

Buffalo Wild Wings (BWLD)

Buffalo Wild Wings has been cruisin' lately.  If you are looking for a good time to jump in, one may be coming up in the very near future. 

 

This is a Daily chart of BWLD

About a month ago, when BWLD announced earnings, would have been a good time to buy some shares.  It has gone from about $137 (after earnings) to $150ish where it is now.  In the process of getting up to 150ish it has created a well defined triangle.  The top of the triangle and the hypotenuse of the triangle are your guides for a new investment should you want to make one.

If you invest (long) here, don't let the price drop below the hypotenuse of the triangle.  If it drops below intraday then you can decide if you want to see where it closes.  If it closes below then going long may not have been the best decision.  Set your stop just below the green uptrend line.  I would say 145 to 148 is a good place to put your stop.  The uptrend line is currently at 148ish.  Remember that setting a stop is like you saying, "I am willing to throw $X.00 out the window if this doesn't work."  Investing is risky.  But you have to limit that risk so it's tolerable.

Once the price closes above the top of the triangle, you want to look for confirmation.  You want the next day or two to stay above the top of the triangle.  A close back below won't be a great sign if you are long. 

Monitor & adjust your stop.  The plan here is that the price will go above the top of the triangle and continue higher once that happens.  If you put your initial stop in at $146.50 to protect your initial investment just in case the plan didn't work out, then move it up to say 150ish or "your break even" once the plan comes to fruition.  Then move your stop even higher once the price has extended.

Protect your profits.  If this plan goes off the way I hope it will you could see a price increase of 3-10% in a relatively short time.  If you find your investment is up 3-5% in a month you should take some profits.  How?  Sell some shares.  Maybe sell 20% of your initial investment and let the other 80% run for a while.  As long as it follows the uptrend line just sit tight and watch it grow.  Eventually you will want to take even more profits. 

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.

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