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We focus on trading strategies that have historically given traders a significant edge when it comes to investing in the stock market. We have worked under and have been trained by some of the top investors of the past 25 years including WILLIAM O’NEIL(bestselling author and founder of investors... More
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  • CHART OF THE DAY- AONE How we saw 2 solid entry points and how to know when to sell. 0 comments
    Dec 29, 2009 11:59 AM | about stocks: AONEQ
    Chart of the day
    2 powerful entries followed by validation to keep us in the trade.

    Entry #1 was made after we saw the first indication the downtrend was over. It worked right away for multiple reasons.
    Entry #2 was a trade entry with even higher odds of success. The reason for this was we first had a positive move higher after entry #1. Those short term gains were digesting nicely when the stock created a nice base on base pattern giving us validation that the downtrend was over for now. We once again got a nice pop after entry #2 and those gains were also digested nicely. We now had 2 higher probability entries with nice profit cushions. Now the hardest part is always knowing where to get out?

    Validation The December 15th whipsaw off the lows once again showed us that the way to play this stock was on the long side. That day started out by heading lower but later reversed to close above the 10 period Moving Average. The very next day we once again held that short term support area and this was imediately followed by a big move higher through the newly present 50 day moving average the following day.

    Playing a stock solely becuase it trades off it's 10 period moving average can be profitable but risky because of the potential short term whipsaws that can occur. Noticing when such action occurs can however be used for short term trend validation purposes.

    The 10 period moving average is an area that holds up when a short term trend is strong and a majority of the players are looking to be long the stock. It can also be viewed as an indication of how aggressive those bullish investors are. In this case we already had 2 solid entry points and did not need to take another higher risk entry off the 10 day MA action. We had the luxury of using the action off the 10 period MA for validation purposes and this action which was soon followed by another surge higher.

    By identifying these first 2 high probability setups and using our validation techniques allowed our subscribers to get moves of over 20% and 33% in the December alone.

    Brett Marsh
    Chief Market Technician

  ("Company") is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. The analysts and employees or affiliates of Company may hold positions in the stocks, currencies or industries discussed here. You understand and acknowledge that there is a very high degree of risk involved in trading securities and/or currencies. The Company, the authors, the publisher, and all affiliates of Company assume no responsibility or liability for your trading and investment results. Factual statements on the Company's website, or in its publications, are made as of the date stated and are subject to change without notice. It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results of any individual trader or trading system published by Company are not indicative of future returns by that trader or system, and are not indicative of future returns which be realized by you. In addition, the indicators, strategies, columns, articles and all other features of Company's products (collectively, the "Information") are provided for informational and educational purposes only and should not be construed as investment advice. Examples presented on Company's website are for educational purposes only. Such set-ups are not solicitations of any order to buy or sell. Accordingly, you should not rely solely on the Information in making any investment. Rather, you should use the Information only as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments. You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment. HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING AND MAY NOT BE IMPACTED BY BROKERAGE AND OTHER SLIPPAGE FEES. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. 603 S. Prospect Ave Suite #203 Redondo Beach, CA 90277

    Disclosure: No positions
    Stocks: AONEQ
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