More Setups

Box trade or Channel trade

Figure 25 Channel trade daily

Figure 26 Box Trade Daily with bull flag

Box trading or channel trading uses an established range where there is enough variation in price to make trading within the box or channel possible. The concept is to sell or go short at the top of the box or channel and buy or go long at the bottom of the box / channel  placing a stop loss stop just above or below the channel. 

BOSS (Bounce off Strong Support) trade

Figure 27 BOSS Example Daily

BOSS trades are bounce plays off of some sort of strong support. The more indicators you have as support the stronger the bounce is likely to be. Moving averages, Fibonacci levels, price support, trend lines, Bollinger bands, pivot points, and a host of other indicators can serve a support for a bounce. Aligning multiple indicators increases the odds of a successful bounce play. The same can be said for a reversal at resistance for a fade trade.   

Cup with handle

Figure 28 Cup with Handle Formation Weekly

There are several variations, a cup with handle, cup without handle, saucer with or without a handle. The concept is relatively the same where you get a nice rounded bottom back up to a resistance price from the left side of the chart to the right side of the chart where you may or may not have a handle form and then break out. One of my favorite books to explain this setup in detail is “How to Make Money in Stocks” By William J O’Neil founder of Investor’s Business Daily. 

Markets look weak again this morning, new  tax inversion rules from the treasury are not helping the market this morning. As I stated this weekend in the video there wasn't a lot out there that gave me a warm fuzzy feeling. We could continue to pull back a bit. I have reduced my position sizing and have began building my wish list of stocks I want to buy on sale. 

Stocks on the radar this morning

MCP active premarket looking for trendline break with volume, TTOO pr yesterday recent IPO looking for trendline break,  RWLK pr trendline break, NXTD possible continuation day, TKMR continuation off pr, JRJC trendline break, VIMC flaggin daily may need more time,  CJJD china name thin active premarket possible continuation caution, SYN possible bounce play 

Gold and gold miners seem to be catching a bounce off the Syria news. 

Be careful out there weakness in the markets is likely to continue so protect your capital, take profits when you have them and cut losses quickly. 

Best of Success!

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