Spike's Scientific Stock Analysis

[sekto]

Hey coli, can you tell me how you came to this conclusion please? Im rather new in the tech analysis side so I'd like to see what helped you identify and come up with this. Thanks in advance.

[coli]

[IMG] http://img223.imageshack.us/img223/7528/nflx8sd.jpg [/IMG]

I expect my performance fee when you reach your first 10 million

[sekto]

so using your chart in the event that ema 20 crosses above ema 50 it would be a good sign to buy?

[skiracer]

[IMG] http://img223.imageshack.us/img223/7528/nflx8sd.jpg [/IMG]

I expect my performance fee when you reach your first 10 million

Coli,
There's a bunch of sofisticated, knowledgeable, high filutin, money grabbin, technical analysists lurking around here hanging on your every chart and word. You have to do alot better than that last one. Give us something substantial, some kind of dialogue explaining what's going on in your thought process with that chart to kind of back up what you're trying to sell. You might be right but back it up.

[coli]

Haha, it's your money!

I've been studying charts non stop for a while now, and 1 theme always comes up. Play the channel and you are safe. Nothing else is as predictable as the channel. What I have find for short term trading is that moving average is useless, the only thing that counts is the channel (and a few more things).

For NFLX, it looks like it's going to fall off a cliff to 22-23, then bounce back to the channel. The problem with this stock is that there is gap down there to be filled, and it has lost it's momentum long time ago.

[sekto]

During my research of Technical analysis i read a reliable indicator is using the
DMI when DM+ crosses above DM- within last few days and when PSAR goes below price that is a good buy indicator. and when DM- crosses above DM+ and PSAR goes above price that is a good sell indicator. Anyone use this method or have a different method you use? Sharing is caring
Thanks

[skiracer]

Haha, it's your money!

I've been studying charts non stop for a while now, and 1 theme always comes up. Play the channel and you are safe. Nothing else is as predictable as the channel. What I have find for short term trading is that moving average is useless, the only thing that counts is the channel (and a few more things).

For NFLX, it looks like it's going to fall off a cliff to 22-23, then bounce back to the channel. The problem with this stock is that there is gap down there to be filled, and it has lost it's momentum long time ago.

Simply amazing. That's exactly what I thought you would say.

[sekto]

hey coli, i'd appreciate if you'd just list some of the factors/indicators in your deciding of good entry point aside from the channel. Im just trying to learn, Thanks

[coli]

Well, you have consider the context. For example, if a stock is down because it's going bankrupt, channel doesn't really apply does it?

Indicators are almost all useless. They are just derivative of the price/volume action anyways. The price/volume action has everything you need to know. The only indiactors that is kind of good for second guessing yourslef is the fast STO and CCI. ( boilinger band I'm still not sure)

Again, I'm talking about short term (3 hours to 3 days). If you buy to hold, I have no idea what idicator you would use.

[DSteckler]

<< Indicators are almost all useless. >>

Respectfully disagree with you on that one. The fault with indicators isn't with the indicators themselves; it usually lies with the person using them.

All too often I see people using trending indicators when the stock is oscillating or oscillating indicators when the stock is trending. The indicator "doesn't work" so they blame the indicator.

"The fault, dear Brutus, is not in our stars, but in ourselves...."

[coli]

Okay, I'm all ears. Could you give some examples where a specific indicator is good?

[DSteckler]

Use trending indicators like MAs and MACD when a stock is trending; use oscillating indicators like stochastic and RSI when a stock is oscillating (trading in a channel).

How can you tell when a stock is trending? Sometimes it's obvious, like GM (what John Murphy calls Visual Investing). Other times it's not and that's where the ADX is a powerful tool.

The ADX indicator measures the strength of a trend but not its direction. The index uses a scale between zero and one hundred to rate the “trendiness” of a stock or commodity.

The ADX identifies whether the stock is moving directionally. However, it does not reveal what direction the stock is trending, only that it is trending. The stronger the trend, the higher the ADX value. A rising ADX value suggests that the present trend is gaining strength and the trend will continue, while a falling ADX value suggests the present trend is losing strength. A common interpretation of this indicator is that a stock is trending when the ADX passes through 30 and is rising. (See, Star, Barbara [1999]. “How the Pros Use Average Directional Index,” Technical Analysis of STOCKS & COMMODITIES, Volume 17: October, for more information on the ADX indicator)

The longer a stock trades in a narrow consolidation (congestion) range, the less trending motion it exhibits during the lookback period. Just as a strengthening trend is measured by an increasing ADX value, a weakening trend is measured by a decreasing ADX value. The research and backtesting I did when developing the Stochastic Pop indicator revealed that when the ADX falls below 20, and particularly below 15, the stock has “non-trended too long” and is likely to soon break out of its trading range and initiate a new trend.

[DSteckler]

Forgot to add that oscillating = non-trending. When the ADX is falling, particularly below 25, use oscillating indicators to get a truer picture of what's likely to be in store for the stock's future action. When the ADX is rising and gets above 30, switch to trending indicators to avoid exiting your position too early.

[Adam]

Just quickly on channels, trendlines, etc, they are simply areas of resistance. It comes back to the basics; resistance is resistance until it isn't. Booming channel action is the whisper that buyers just don't see the resistance, and once broken, it becomes support. How long this type of action can happen really cannot be defined. The market will do what it will do. I do know this: smart money sells resistance and buys support. So no matter what this issue does, you want to aim to be selling at a resistance point, rather than after a drop to a support level. Sell into strength at resistance that you see as strong, and walk away happy. Don't focus too much on picking tops or bottoms, although that's nice when it happens. Focus on planning well, planning smart, using the BASSAR (buy at support sell at resistance) mentality and execute well, and don't let emotion of greed cloud your senses. Patterns and channels can help you do that. And once you're out, if you love the stock and the chart, patiently stalk your next entry, and buy into weakness.

Thanx for the chart spike! Loved the discriptions on the chart. Now I think I got about 100% better unerstanding of the channel and support lines. I second guessed myself at the buy point you pointed out on WBMD. Second guessing, my second biggest enemy to that patience thing!!! Always workin on it...lol

CMED is another that made me some money and I got out a little early. Its been flat a bit but the they have good sales #'s and EPS % increases. I love china scientific and medical cuase you know they already used it on thousands of people( before it was approved).

[DSteckler]

It is possible to successfully use oscillating indicators during trending conditions. My friend and AAPTA colleague Constance Brown talks about some of these techniques this in her excellent book, "Technical Analysis for the Trading Professional."