online stock trading, online trading

by Ken Matsumoto - Mar 26, 2007
Swing Trading Strategies for the full or part-time day trader.
Swing Trading is the art of capturing profits in trending stocks in a relatively short amount of time.

Notes to Charts:

Daily Chart:

• This chart starts with a nice MA uptrend starting with a crossover up at point ( A )
• Market followed with a smooth trend above the 20 day EMA.  There were over 7 pullbacks to the 20 day EMA which proved to be successful retests going into February
• We will continue to keep our eyes on the 20 day EMA, which can give great signal for the sustainability of the current trends.  Market plunged through the 20 day EMA ( B ).  We will watch the MAs and action around the 20 day EMA carefully going forward
• Recent decline has the Daily chart in a new Downtrend with 20 EMA crossing down below the 50 EMA ( C ).  Despite the move back up above the 20 EMA, the Daily chart is still considered in a downtrend.  We will keep a close eye on the MAs going forward for any changes in trend
• Market traded sideways on the day, closing above the 5 day EMA ( D ), maintaining a short term uptrending bias. 
• Stochastics remains in an uptrend ( E ). 

Hourly Chart:    

• This chart shows an overall uptrending Hourly chart dating back to January, when it broke out of a sideways range. 
• The frequent crossovers within the overall uptrending channel resembles a countrend or trading range type of environment.  This type of trading conditions are very challenging to trade in
• Market pullback has MAs crossing down into an Hourly downtrend at point ( F )
• Market fell through its trading channel ( G ), following through on its overall Hourly Downtrend
• Market experienced a nice follow through to its break out of the recent trading channel
• Market rallied off its recent lows ( H ) to surge past the 20 hour EMA.  This marked the start of a countertrend on the Hourly charts
• After a rally to the MAs, market has revisited the recent lows on the market.  Note that the 20 EMA remained below the 50 EMA the entire time, thereby keeping the downtrend intact
• Hourly chart resumed its downtrend taking out the recent lows on the market.  The market then rallied back into the recent range ( I ), signaling a possible start of a countertrend or consolidation period. 
• Market rallied causing the Hourly MAs to cross up into an uptrend ( J ).  The Hourly chart is now considered into a sideways to uptrend with the 20 EMA above the 50 EMA
• Market action today is a continuation of the overall Hourly uptrend

5 Minute Chart: 

• Intraday market has entered into a sideways trading range.  We will keep a close watch out for any breakouts/downs from this range

Assessment:

The longer term trend is down with the 20 EMA below the 50 EMA on the Daily chart.   We will continue to keep our eyes on the 20 day EMA for clues on the sustainability of the current downtrend.  The market surged above the 20 day EMA today raising a slight red flag to the current downtrend.  We will continue to watch market action around the 20 day EMA going forward. 

The short term trend is sideways to up with the 20 EMA above the 50 EMA.  This is confirmed with Daily prices above the 5 day EMA and  Stochastics in an uptrend.   Despite this assessment, we do temper our enthusiasm for any large moves to the upside due to the overall downtrending Daily chart.  We will keep a close watch on the Hourly MAs for any changes in trend.

We now have conflicting signals between short and long term trends.   Due to this mixed signals we will keep trading conservative while looking for opportunities on both sides of the market.

These charts are here to help you get a visual picture of where we stand in the market from a broad to a very detailed perspective. Recognize where we are and what kind of trend we are in, rather than trying to predict market direction.