SGX

St Engineering

Singpost - coming soon?

Sometimes keeping simple is good and a picture speaks a thousand words :)

TA - Healthway

Healthway daily show potential MCAD divergence but weekly chart does not demonstrate that.

Its Q2 is not good and its not very bad either, but at least its cashflow from ops become positive.  

I pray hard and hope that the daily divergence can get stronger and override the tide so that I can do some cut loss selling. Hope the testing of resistance at 20MA is successful.

Example - Force index bearish divergence

There are many people who talk about force index. My brokerage Iocbc do not have this indicator, thus I dont bother to go and learn.

However, curiosity overwhelm me yesterday. I went to download ChartNexus and read up about Force Index online.

In this post I shall share what I have learnt and understood from my research.

The Force Index is an indicator that uses price and volume to assess the power behind a move or identify possible turning points.

High positive values mean there is a strong rising trend, and low values signify a strong downward trend.

Force Index (1) = {Close (current period) - Close (prior period)} x Volume
Force Index (13) = 13-period EMA of Force Index (1)

To get the value for force index(13)
(1) Draw EMAC(13)
(2) Minus EMAC(13), example 1.1, of today against EMAC(13), example 1.08, of yesterday. You will get 0.02. If the volume today is 50000, Force Index(13) for today is 50000*0.02 = 1000, which is postive force index value above the zero axis. If today's value is lower than yesterday, you will get a negative force index.

Thus, the Force Index is positive when the current close is above the prior close. The Force Index is negative when the current close is below the prior close.

Let me share an example of Bearish Divergence for Force Index.

Example - Daily Bearish Divergence

Previously I had shown few examples on Bullish Divergence, I guess it is the time to record something on the other other extreme - bearish divergence.

Although I been discussing about TA recently, overall I am still a more FA person. Fundamentally strong companies should be first consideration before TA. (of course, money management, psychology and current market sentiments are much more important.) However, its good to learn from both school of thoughts.

I listed 5 vertical lines in this chart.

a-b-c-d-e

a-b-c:
Price goes higher high but MCAD histogram goes lower high with b crossing below the center line. This indicate bearish divergence.

A few days after c where the red MCAD histogram bar start to appearing is a good sell. 

d:
price decrease and MCAD histogram went below center line

e:
price went up again to previous high but mcad still cannot make it and did not even cross the centre line above. 

If miss the selling few days before at c, this is the second best time to sell.

Bullish divergence example 2

Copy from previous post:


Bullish divergence:

• Price form lower low (A->C), MCAD histogram form higher low (a->c)
• Must have ABC in price chart and abc in histogram chart
• a and c below center line, b above center line

above only valid and can go long ONLY if
higher time frame show bullish divergence(weekly), current time frame(daily) show bullish divergence

Daily

Weekly

This time round I draw an additional "one" line. If you compare the histogram this "one" line with "a" and "c", the selling pressure ease. Line abc demonstrated divergence. If we add in the support line of 1.86, a good buy will be 1.86 at time of line c which is around slightly more than mid march.

Bullish divergence trading - example 1

Copy from previous post:


Bullish divergence:

• Price form lower low (A->C), MCAD histogram form higher low (a->c)
• Must have ABC in price chart and abc in histogram chart
• a and c below center line, b above center line

above only valid and can go long ONLY if
higher time frame show bullish divergence(weekly), current time frame(daily) show bullish divergence


From my process of searching through the charts to have a sample of the stringent divergence pattern as describe above in bold, I realise that it is not easy to have such chart available. Most of the time, the chart will not demonstrate ALL of the rules above. No wonder it is such a good trading opportunity once such chart are spotted.

In the example below, the daily chart fulfill the abc and ABC.

 

However, the weekly chart does not fulfill it at all. 

Stringently, the above does not fulfill the daily and weekly bullish divergence. 

However, in the example above, I am using the daily to demonstrate the bullish divergence. 

In this example, a good buy day will be at the day after the vertical line c-C somewhere slightly before mid march around 3.18.

Bullish divergence trading - guidance from La papillion

This post summarise what I learn from LP, owner of Bullythebear blog. I will follow on with 5 charts after this post for applying and checking what I had understand so far is correct or not. 

Bullish divergence means that the price has a high chance of going up.
The divergence refer to the fact that price and whatever indicator you are seeing, are moving in opposite direction.
Example, if use vol, then a bullish (vol) divergence means that the price showing a lower low, but vol shows a higher low.

If you see a bullish Divergence on weekly and a bullish Divergence on daily, what will you do?
long

If you see a bearish Divergence on weekly and bearish D on daily, what will you do?
short

If you see bullish Divergence weekly bearish Divergence daily?
There's no correct ans. First of all, the general guide is to either stay sideline. You can either short it but run fast (since weekly is bullish, so you're going against longer timeframe) but you do not buy

If you see bearish Divergence weekly bullish Divergence daily?
hold sideline. can long it but must run fast.

Once weekly and daily sentiments are matched, go in the direction of that sentiment

Example:

Psychologically, the price goes down at A but rises up to break the back of the bear at B, then goes down one more round at C.

But you'll notice that the selling pressure at C is weaker than at A, by looking at the macd histogram the selling has eased off when it reaches C...that's where it's the best time to counter trend and bet on a reversal. Buy once it goes above the price of A. Could add in support and resistances too.

Must have ABC in price and abc in macd histogram. point B indicate the breaking of the back of the bear.




Courtesy from http://triple-screentrading.info/blog/?page_id=813
"The concept of triple screen trading is this: Do not trade in the current time frame unless the upper time frame allows you to trade."

Analogy of bullish divergence on two time frame.
The current time frame is like order from your direct boss whereas the upper time frame is like order from your biggest boss. Big boss determine the stronger trend and rule but sometimes direct boss try to disobey the big boss but it may or may not be successful. As you are only a small fry, you have no choice but to listen to both bosses, but the overall power still in the hand of the biggest boss.

If biggest boss pass down a rule, direct boss try to disobey and cause big anger from biggest boss. As the biggest boss is biggest, you should not disobey. Biggest boss pass down rule 2, direct boss disobey again but manage to succeed one time. Biggest boss pass down rule 3, this time the direct boss try to disobey again. Although there is anger from the biggest boss again, but the anger was much milder as compare to the first time. This shows that there is a probability that the direct boss got chance to break out of the rule of the biggest boss. Thisis the best chance to bet against the biggest boss.

Updated below: Summary
Bullish divergence:

• Price form lower low (A->C), MCAD histogram form higher low (a->c)
• Must have ABC in price chart and abc in histogram chart
• a and c below center line, b above center line

above only valid and can go long ONLY if
higher time frame show bullish divergence(weekly), current time frame(daily) show bullish divergence

Type of candlesticks

TA - CMA

Comparing slope of OBV and MFI vs slope of the price over the recent weeks. There seems to a possible divergence occuring. Price drop lower, but MFI and OBV does not decline as fast.

MCAD also indicates more green histogram slowly edging over the centre line.

Will reversal occur? Might be possible but needs to be patience.

If it drop further, I will not cut loss. Instead might add more positions at 1.60 if I got more money.

TA plain and simple - Michael Kahn

Some common continual patterns:

1. rectangle
2. triangle (ascending, descending, symmetrical)
3. flags
4. cup with handles

Some common reversal patterns:

1. head and shoulders
2. double tops and bottoms
3. one day reversal
4. triangles and rectangles
5. rounded tops and bottoms
6. spikes

The above chart patterns can be easily found on this internet, thus I am not putting examples of the chart here. However, it is not that easy to recognise these patterns on real life chart. Slowly will know more if see more charts everyday. And volume plays a big part in these patterns too.

TA Breadtalk

ADX: Downtrend
William%: Oversold
OBV: increasing
MCAD seems going up
Fibo Retracement: 0.60 support
EMA(200) found at 0.62

It seems like the downtrend is quite oversold. Based on TA, A good buy will be at 0.62, a better buy at 0.60.

However, based on my previous post, fundamentally I will not buy at 0.60.

(Disclaimer: The above is based on my personal opinion to record my thoughts and thinkings.)

My attempt at CMA

Uptrend seems strong from %william R.
MCAD crossover to uptrend
EMAC(20) closing upwards towards EMAC(50), might break EMAC(200) soon

Immediate support:1.84
Immediate resistance:1.95