This tweetstorm is inspired from the wisdom of @dryan310 who is one of the all time greats and wisdom beyond all.
David Ryan in his latest appearance:
1/ Leadership is changing dramatically.
Lot of stocks rising first from march lows have started to underperforming.
2/ Expect some kind of pullbacks.
Let the market talk.
*Caution:
-Cyclical start to pick up
-Growth players slow down
-Start to cut moving averages
-Fall with higher vols
3/ In climatic runs raise cash.
Following rules keep u disciplined 4-6 week bases are important.
Trade with a small amount of capital and wind.
Sway with where the wind is blowing.
4/
-On sell side: always look for change e.g. change in acceleration
-Stock trade higher and close lower
-Pick up in volumes, big break in vols, u got more downside or time to make bases.
A consistent rally ends with 3 down days in continuation.
5/
***Relative strength line:
-break of uptrend in RSL. Start to underperform
-If starts to move in downtrend its bad
-Divergence btwn price & RSL
-Relative strength line shows confirmation
-Give much emphasis to it.
Its against the NIFTY
-RSL sud confirm rise in prices.
6/
Stair case moves r good: sideways up and repeat.
Rather than choppy and volatile moves. That's where big money liquidation happens.
7/ Increased volatility: wide price moves,a bad sign.
Further bad signs:
-Break of uptrend line on big vols
-Be cautious on 50dma break
-Big vols on downside
-Change in character
-Wedging rallies after large breaks
-New high in price RS doesn't confirm
8/
The farther the move goes without further base then ur risk increases.
U r just pushing an envelope how far a stock could go in a bull run
Only good things happen above 50dma.
9/ Downtrend: (initial phases)
Price breaks in high vols
RS line goes in downtrend
Then wedges up, and breaks
Price sud move side or down
Look for what goes on in staging prices.
Compare left side of the chart with RHS.
10/
***C&H within vols: (innovation)
Trace vols in cup shape
Handle too in vols
See patterns in volumes
11/
**Good signals to look for:
Tightening in stocks
Find difference btwn huge winner vs steady winner
Try to get some bigger slower names in ur list. Pack with few slower names
In upmove: vols sud not necessarily b high everyday
If vols r high on down days then money is leaving
12/
Drift sideways when market is falling.
Long bases are great.
5 years breakout is aweosme.
13/
***Spaceship-rocket analogy
U need great thrust via fuel burn at launchpad
When u go up u go with the flow
Same thing with price & vols
14/
Let the market show wht areas are working.
Take money out to weakening out.
Don't get so attached to names that u never sell it.
Sell off something on margins and position too big.
15/
Hav your rules intact. It takes the emotions out of the game.
If stocks r rolling over and u need to raise cash and look for proper setups.
***The end****
• • •
Missing some Tweet in this thread? You can try to
force a refresh
A lot of distribution days piled up in a short time recently. Pattern: Inverted Flag. A close below 17613 with above avg vols wud confirm a downtrend and the start of panic selling. Rather one can say it's at a major support zone.
NSESMLCAP: At a major junction. 2 weeks to decide
Important key: Major winners of the Covid rally are either in STAGE 3 or entered STAGE 4. Major tops are seen in many past winners, more tops coming soon. The next 2 weeks are very crucial. AUTO & INFRA to stand out in strength.
NIFTYAUTO: Some scope here. Many auto stocks are setup strong with major earnings this week.
Not listening to the market is a flaw
Listening to people, watching TV: Bad habits
Stage Analysis: Break the market into 4 stages. 1. STAGE 1 2. STAGE 2 3. STAGE 3 4. STAGE 4
2/n
Sometimes the simplest system is the best system.
Ideal buy point is when stock comes out of stage 1 & enters stage 2
Stage analysis works completely against the normal market participants
Psychology=Inverse(What needs to b done in the market)
Stages are determined wrto KMA
3/n
B.O. sud b accompanied wit vols
Establish position from stage 1 B.O and retest.
Look for stocks with no upward resistances
Bigger the stage 1 base the better
The sector is important: can dramatically improve returns
Check for 2 years of resistance.
TSLA, 2019(6 yrs base).
FAZE3: Real Round Cup & Base formation at the peak.
Outlook: AR2021
By Rule of 72:
At 18%, The Income wud double in 4 years.
The Income growth seems conservative.
Fundoos:
~Highest ever Quarterly revenues since inception.
~Topline & Bottomline Acceleration
~Seems to be a breakout in Earnings in the last 3 years.
~Being a small player seems to take the Margins hit.
Two things I have seen yesterday but not quantified yet.
1. Most of the NIFTY50 or biggies r below 50dma and looking to kiss 200dma.
But, the Index is hanging above 50dma for some strange reasons.
2.
Internally the stocks falling below 50dma in the whole universe has widened
There wud b tons of breakouts reversals to be seen.
Some choosy sectors/names would run.
Most good to great results r discounted specially in IT & PHARMA.Textiles stocks r giving fab results & the moves r discounting the earnings breakout above multi-year average.
Lastly, I am seeing vintage stocks or stocks with long bases which I have been tracking for long Breaking out now.
Case: TEJASNET
It has been in key list for way too long. Last 4-5 days r continuous circuits and cleared the trigger point convincingly.