Google (GOOG) Technical Chart Analysis using Elliot Wave Theory

1 May

Google’s (GOOG) chart looks interesting right about now. For those of you who want to go long, you might want to give pause and watch the price action for the next couple of days.

The chart pattern looks a lot like an Elliot Wave with today capping off what might be wave 5. If true, then, wave A, B, C are next and that is a reversal of the uptrend. Yesterday and today may be forming a “lower high” on Google’s stock chart. If there is selling on volume tomorrow or in the next couple of days, I would consider shorting Google’s stock with a stop at 827.80.

Here is Google’s stock chart overlaid with the different phases of the Elliot wave.

Google's stock chart showing an Elliot Wave

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S&P ETF (SPY) Short Setup

1 May

The market has had a fabulous run this year so far. There’s a saying though that goes something like “Sell in May and go away”.  I don’t know how true that is over the years, but the S&P 500 looks like a good short opportunity right now after today. The market’s advance seems to be stalling.

The S&P 500 technically has formed a double top chart pattern. On 4/11, the SPY ETF closed at 159.19 with a high of 159.71. Yesterday, 4/30, it put in a similar high at 159.72 and closed at 159.68. Today, the market sold off .88%. The stochastic is in oversold territory and the volume today was above average at 135.8 million shares traded. The closing price of the SPY ETF sits right at the 8 day moving average.

I decided to short 100 shares at 158.92 with a stop at 159.50.

Here is the daily chart showing a double top. I will add to this short if it continues down tomorrow.

The S&P 500 ETF showing a double top chart pattern.

The S&P 500 ETF showing a double top chart pattern.

Tesla Motors (TSLA) Short Stock Update

1 May

Tesla Motors had another distribution day today on average volume. Tesla Motor’s stock dropped 1.41% today. Most of the selling happened in the last minutes of the trading day. Today’s candlestick was not able to break above yesterday’s high and made a lower low today. I tightened my stop to $55.99. I did not take any profit today. Yeseterday, I missed some possible support levels. In today’s Tesla Motors stock chart, I drew lines where possible support might be. The first would be at the 8 day moving average. If the stock touches this moving average, I will take half of my position off the table for a small profit.

TSLA Motors (TSLA) stock chart for 5/1/2013

Telsa Motors (TSLA) – Nice short setup

1 May

Tesla Motors has had a nice run on some good news. But now, the run looks overextended; at least in the short term. This looks like a great short setup for Tesla Motors (TSLA). On 4/23, the stock put out a doji candle with a long wick on top indicating a possible reversal. Volume was above average at 3.7m shares. The following day, the stock put out a red candle on average volume. TSLA stock had another distribution day on 4/26 on higher than average volume of 3.6m shares and finally today (4/30), it had bigger distribution day on high volume (5.5m) shares and another reversal candle.

The stochastic reading for TSLA stock has been in oversold territory since 4/18. It currently reads 83.89 and heading downward. Some support can be seen at the 8 day simple moving average ($51.45), at $46, and at $40.21. Below $40.21, I would look for a gap fill. See TSLA’s chart below:

Tesla Motors (TSLA) Short Setup

IBM – International Business Machines

1 May

IBM continues to recover from its nose dive racking up $3.39 or 1.70%. Moved up stop loss to $198. Volume continues to increase with this move up. It’s always good to have volume confirmation.

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RJF – Swing Trade Setup

1 May

Nice candle today on RJF which was added to the watchlist yesterday. I initiated a position in RJF. 100 shares @ closing price of $41.42. Stop loss @40.

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Raymond James Financial (RJF) – Added To Watchlist

30 Apr

I added RJF to my watch list today. It has gone from a high of 48.22 on 3/20/2013 and has dropped to $40.24. This gives enough room for a nice potential swing trade. It has had three consecutive down days with the second and third day showing smaller candles and lower volume. The last candle is a nice upward hammer which I always like. Also, it is near both the 200 day moving average and up trend line

I’ll look for an up day within the next couple of days to start a long position. If the price breaks below the trend line, I’ll remove this from my watch list. Here’s is RJF’s stock chart today:

RJF (Raymond James Financial) Stock Chart

Nam Tai Electronics – Added to Watchlist

30 Apr

NTE stock had a huge down day today dropping 31% and extremely high volume but formed a nice wick by end of trading day today. Resistance for this stock seems to be at the $6.50 level so I decided to add this stock to my watch list. Looking for it to have two or three more down days towards resistance, and then, hopefully a nice swing low develops. Stochastics reads 13.96 and pointed downwards.

I put this on my watch list more as an interesting case study than something I would actually trade. The reason is I haven’t studied many cases in which a stock drops 31%. Is a stock with such a large percentage drop in one day able to recover in the near future? Does support and resistance work in these types of instances? As they say, watch and learn.

Here’s NTE stock chart for today:

NTE stock chart 4/29/2013

IBM (International Business Machines)

30 Apr

One of the first stocks I added to my watch list on April 24, 2013 was IBM. IBM had just reported earnings and it was a terrible miss. As a swing trader, you’re not really looking at the news. However, anything that causes a dramatic drop in a quality stock should be looked at for a possible swing trade.

The stock took a nose dive the following two days sending it into oversold territory according to the stochastics technical indicator. After the second day of selling, the stochastic indicator showed a reading of 4.2. Typically, a stock is oversold when the stochastic reading dips below 20.

On April 23, the stock rebounded nicely and made a possible swing low setup. My first scan began on April 24 so I missed this setup. It was already forming a nice swing low and I added to my watch list. At this point, the stock had moved too far from its lows to justify a position in the stock. My stop would have been too far from the current price. So, this will be a “paper trade”.

Today, the stock moved up with conviction across the 8 day moving average on slightly higher than average volume and closed just right under the 200 day moving average.

For my paper trade of 100 shares,  I opened a long paper trade near the close on 4/24 (the scan date) and set my stop at slightly below the low of 4/22. I would have scaled out half of my shares today near the close of the day because of the huge candle today. Gains as of 4/24 would have been $744.

As it rests slightly below the 200 day moving average at the close, I would be cautious of a pullback. I would move my stop to 196.50 which was the high on 4/19. I am hoping that will serve as resistance for now.

Since the price has entered the gap down, I’m looking for it to fill some or most of the gap before a pullback. I’d raise my stop daily on any up days and scale out more of my paper shares on any big candles. Here’s IBM’s chart.

IBM

My First Watchlist

30 Apr

On April 24, 2013, I started using TC2000 to create a custom scan to help me find stocks which I labeled as “Swing Lows”. These are stocks which are currently oversold and could soon form a “swing low” price action setup. If I feel the stock is a trade-able stock, I will add it to my “Swing Low” watch list.

On the first day of my scan, I added the following stocks to my watch list: EBAY (eBay), FLR (First Solar), GE (General Electric), QEP (QEP Resources), IBM (IBM), CTSH (Cognizant Technology Solution Group), and PG (Procter & Gamble). I’m encouraged because since 4/24, most of these have shown positive gains except eBay.

Everyday, I will run my scan on the market to try and find new stocks to add to my watch list and analyze those which is already on my watch list. Those that have failed to follow through or have reached price targets, I will remove my my watch list.

So, here we go….