Steckler's Star Studded Stock Picks

[DSteckler]

WLT looking toppy

Made a nice run since breaking out last week but ADX is still low and stochastics are very overbought. Volume Flow Indicator has rolled over and today's bar has pulled back well below the high.

IOW....buh bye position.

[DSteckler]

ATAC worth watching

Daily range has been narrow the past 6 weeks. May be trying to get something going today.

[DSteckler]

PD buying opportunity?

PD has pulled back to its 50DMA for the first time since 11/1. Nice rising trend channel and pullbacks to the MA have been followed within two months to a new high.

[DSteckler]

HEOP crushed

Down 10%. Anyone see any news?

[spikefader]

WTI is breaking out of a continuation H&S pattern. Pattern calculation is the distance between the inverted head (28.65) and neckline (32.43), 3.78, added to the pivot (28.70), for a target objective of 32.48.

Hiya DSteckler

Hope yer havin' a blessed day dude.

Is this the pattern you're referring to? I'm a little confused by your numbers there. Maybe I haven't had enough coffee yet

Also, are you long this one, and if not, where would you suggest an entry at this point?

Thanks.


EDIT: corrected the wrong quote reference.

[DSteckler]

Here it is:

http://www.ttrader.com/mycharts/display.php?p=38367&u=dave&a=MyCharts&id=690

[spikefader]

Here it is:

http://www.ttrader.com/mycharts/disp...yCharts&id=690

Is that really where you place your neckline? Seems a little outa place to me??

[DSteckler]

No, that's the proper placement.

What capture program did you use to get it to appear on the MM board?

[spikefader]

Thanks, but doesn't proper placement put the neckline touching the shoulders at the neck?

I use the Prt Scr button to capture what appears on screen, paste it into irfanview (www.irfanview.com) and crop it, save it as a jpeg and upload to www.imageshack.com. When it finishes uploading to imageshack they give you a bunch of links and I use the imbeddable code line and paste it directly into my MM post.

[Gatorman]

No, that's the proper placement.

What capture program did you use to get it to appear on the MM board?

I'm no expert chartist but it appears the neckline should be drawn from 31.00 to approx. 31.50

[SledDawg]

I'm no expert chartist but it appears the neckline should be drawn from 31.00 to approx. 31.50

That's my understanding, too, Gatorman. Neckline should run through the two reaction highs on either side of head.

http://www.stockcharts.com/education/ChartAnalysis/headShouldersBottom.html

[DSteckler]

You're looking at the wrong H&S. You guys are looking at an inverted H&S bottom while I'm looking at a continuation H&S. The neckline of the latter connects the highs before the left shoulder and after the right. Necklines ideally are horizontal which is why I drew it where I did (1/20), although the previous bar (1/19) could also have been used.

[spikefader]

You're looking at the wrong H&S. You guys are looking at an inverted H&S bottom while I'm looking at a continuation H&S. The neckline of the latter connects the highs before the left shoulder and after the right. Necklines ideally are horizontal which is why I drew it where I did (1/20), although the previous bar (1/19) could also have been used.

Sorry dude, I'm still confuzzzzed.

Your labelling identifies the "LS" "HEAD" and "RS", so naturally that was the one I thought you were talkin' about. The labelling as you have it shows an inverted SHS pattern. I'm not understanding which SHS I'm not seeing. Would you please draw it?

Perhaps "continuation head and shoulders" is some alternate variant of the usual SHS methodology?

Thanks.

[Gatorman]

You're looking at the wrong H&S. You guys are looking at an inverted H&S bottom while I'm looking at a continuation H&S. The neckline of the latter connects the highs before the left shoulder and after the right. Necklines ideally are horizontal which is why I drew it where I did (1/20), although the previous bar (1/19) could also have been used.

I think I have finally figured out what you are doing. It appears you are taking the SHS formation from Sep/Oct 2005 and projecting it forward to the inverted SHS recently formed. Is that correct?
If so, I have never seen that before and I don't understand how it could be valid. I'm always willing to learn new things and maybe there's validity in doing such a thing.
On the other hand, I may not be correct in what your are doing. Would be interested in seeing your reply to Spike's question.

[DSteckler]

<< Sorry dude, I'm still confuzzzzed.

Your labelling identifies the "LS" "HEAD" and "RS", so naturally that was the one I thought you were talkin' about. The labelling as you have it shows an inverted SHS pattern. I'm not understanding which SHS I'm not seeing. Would you please draw it?

Perhaps "continuation head and shoulders" is some alternate variant of the usual SHS methodology?

Thanks. >>

There are four variations of H&S patterns, Spike and Gator: H&S top, H&S bottom (also known as an inverted H&S); and Continuation H&S, which can appear either during a sustained trend higher or lower.

All CH&S patterns look like an inverted H&S because the shoulders are higher than the head. The major distinction is when the appear and where you draw the neckline.

Prices of any stock (or future or commodity) move through a four-phase price cycle:

Accumulation;
Mark-Up;
Distribution; and
Mark-down.

In the accumulation stage, buyers edge out sellers and prices creep higher. The mark-up phase begins with a breakout and once that happens, buyers become more aggressive. Gaps are common here.

Toward the end of a major trend is the distribution phase, during which sellers dominate and the price moves lower. The mark-down phase begins once significant support is violated (e.g., 200DMA) during distribution. Volume dries up during rally attempts. Just like in the mark-up phase, breakaway and continuation gaps are not uncommon.

While generally speaking either a H&S top or H&S bottom pattern is normally considered a reversal pattern, they may also act as a consolidation pattern. An IH&S that occurs during the mark-up phase is called a CH&S, a consolidation pattern wherein the neckline is drawn by connecting the significant highs to the left of the Left Shoulder and to the right of the Right Shoulder. WTI was an example of an upside CH&S.

An IH&S that occurs during the mark-down phase is also a CH&S. However, there's a major distinction in how the neckline is constructed. Here, the significant high immediately to the left and right of the head are the shoulders and you connect the shoulder highs to draw your neckline. Contrast that with a CH&S during the mark-up where you're connecting the highs to the left and right of the shoulders, not connecting the shoulder themselves.