Thank you

Good morning folks,
I had a great time last night with Kunal and hope that it was helpful to those who attended. Once I have the link to the recording I will add a tab and post it to the blog.

Setups

There is a wide variety of technical set ups out there and it is not my intention to try and outline all of them. I have discovered over the years trying to learn every system, style of trade, indicator or set up can actually do more harm than good. I have learned that keeping things simple and focusing on a handful of setups that I seem to excel at works best for me. You do not have to know everything in order to be an exceptional trader you just need to know a few things and do them exceptionally well. Set ups or technical patterns will develop in every time frame and you can use them to help determine your entry and exits. The strength of these patterns are more likely to succeed if a longer term time frame supports your bullish or bearish setup.

Dolla Holla or Round Number Roll

If you follow me on twitter you will often see me calling out the “Dolla Holla”. Traders seem to be fixated on round numbers. As a stock approaches a round number people seem to assign some level of significance with the cross of that round number. It can be the $1 dolla holla or the $30 dolla holla it doesn’t really matter but as it approaches the round number, in either direction up or down, it often becomes a magnet. If it crosses below a round number it seems to confirm the stock is broken and if it crosses above the stock is in play. As always volume is your indicator when trying to assess the strength of a round number roll. You want to see volume rising as you approach a round number to help justify the intensity and conviction of the move.

Figure 13 Round number roll BAC

Figure 14 Round Number Roll Support and Resistance WFM

The concept of the trade is to enter the stock just prior to or at the time of its round number roll in either direction. Pay close attention to the volume as the round number approaches and the price eventually crosses. If it breaks a round number on weak volume consider booking profit and waiting for a more convincing break supported by strong relative volume. This can be a great day trade setup or swing trade. The 1, 5, and ten dollar holla’s  can be especially powerful since they can be associated with a continued listing on an exchange, investment worthy or unworthiness by hedge funds,  and mutual funds due to their bylaws and certain covenants pertaining to the minimum share price they are allowed to invest in.

A few stocks on my radar this morning.

AKS VIMC LOCK STRI CTIC ANR TWTR BONE OPK ARWR 

Best of Success!!