For those who follow order books and see HUGE sellers at certain price levels and shy away because there are sellers;

Note: If there are no sellers there will be no buyers.

continued...
When a fund wants to build a position in a stock, the fund manager wants to be able to buy "enough" of the stock at reasonable prices, without pushing the stock higher.

A big chunk offered in the market is a blessing for the deep pockets to enter into position.
That is why when I see large amount of sellers at certain price (especially if it is a significant resistance on price charts) I'm more convinced that a breakout might be around the corner.
This is a great example for the above tweets. I remember how investors were worried about the IMF selling 200 metric tons of #GOLD back in 2009.

I guess #INDIA Central Bank was waiting for this block sale. And what a great decision... right at the breakout from H&S continuation Image

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More from @TechCharts

24 Apr
Btw, when I was managing funds in MENA, I was trading Saudi Arabia (bigger and liquid part of any MENA fund) and that was adding my work days to 6.

I feel for #cryptocurrency traders. You need some time to unwind, think, read & study. 7 days a week... come on.
For #cryptocurrency traders out there that are still in front of charts on a weekend, here are some updates for you, some well-defined ranges on select few:
$BTCUSD Rising wedge is still in play. 43K can become the target as a breakdown from wedge can retrace back to the beginning of wedge.
Read 9 tweets
19 Apr
Edwards & Magee discussed H&S acting as a continuation chart pattern with a 1936 example. Somewhere in between, new smart authors, thought new generation chartists that H&S can only form as a top or bottom reversal. WRONG.

I can show 100s of similar examples.
A recent #breakout #alert on $CCK
Another H&S continuation example, a recent #BREAKOUT #ALERT from #SINGAPORE reached its price target. SEMBCORP INDUSTRIES. More setups >> blog.techcharts.net
Read 4 tweets
23 Jan
The next 3 tweets will show you that all you need is a clean chart (no indicators) a ruler and a pencil to identify a possible trend period to profit from.

Before we start, our template:

1 year of data on daily scale
Candlestick chart
(my preference white background)
When you open your chart you will see this. Are you able to identify the lengthy and sideways consolidation?

Are you able to draw horizontal boundaries that will be a well-defined rectangle?

Consolidations are usually followed by trend periods. We want to capture that.
Did you draw the boundaries like this? Do we have several tests?
Read 8 tweets
23 Jan
I like to combine classical charting signals with the trend filter (200-day average). A breakdown should take place below the 200-day average and a breakout should take place above the 200-day average.

I.e. breakdown of the neckline will also clear the 200-day average.
Here is a good example where the long-term trend dictated the direction of the breakout. Failure to complete the H&S top and breakdown below the 200-day average acted as a great long signal with the breach of right shoulder high.
Edwards & Magee in their book Technical Analysis of Stock Trends, discussed the H&S failure with this example from 1936. Classical chart patterns are timeless.
Read 5 tweets
14 Apr 20
Currently charts I'm paying close attention to has similar patterns as the one below (name is not important).

From a classical charting + technical analysis perspective I will discuss 3 different inflection points and strategies.
1⃣ Stock completes a H&S top from low volatility condition. Breakdown takes place below the 200-day average. A sell signal (classical charting principles)
2⃣ Stock re-tests lows. Possibility of double bottom but very early stages. A possible buy signal can be justified with only using technical analysis (support/resistance concept). Buy at support, sell at resistance.

This is not a breakout strategy. A mean reversion strategy.
Read 5 tweets
21 Feb 20
You can utilize chart patterns in two different ways.

1) Trade price between well-defined boundaries (need to find a clear chart pattern at early stages)

2) Trade breakouts through chart pattern boundaries

I favor 2.
Following examples will highlight why I favor:

1⃣Breakout strategies
2⃣Horiozontal chart pattern breakouts
3⃣Rectangle setups with several tests of chart pattern boundary
BAE SYSTEMS. Breakout after several tests of well-defined horizontal boundary. No pullback and challenge to chart pattern boundary. Bullish continuation completing above 200-day. #RECENT #BREAKOUT #ALERT #UK #FTSE
Read 9 tweets

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