The sell off in stocks continued on Monday but I think it has reach an area of support which might halt the selling and provide a rebound. With the QQQs reaching the area of its 50 MA, we can expect some slowing down in the selling. A look at the shorter time frame charts such as the 15 min charts also tell us that selling pressure might be decreasing. Once it goes above the 15 min 20 MA and 50 MA, we might have a rebound.
Interestingly, the Dow Jones and the IWM (small caps) are performing much better than the rest. The both of them are in a nice 60 min uptrend. I am now primarily a trend follower and I let my trend following system in different time frames tell me when is a good time to enter and when is a bad time to enter for that particular time frame. By following rules, it somewhat restricts the more flamboyant attitude of trading.
However, I realized by following your own set of trading rules, they help to grow the account. Slowly but surely. Everytime I go against the rules, I tend to make unnecessary losses. Anyway, I use the 20 MA and 50 MA a lot and for those who don't know what the red zones and white zones in the chart below means, do take some time to read this article How To Avoid Huge Losses In Stocks And Maximize Profits Using One Simple Stock Market Trick.
Some people might be wondering why I write all these analysis and share my knowledge and market tricks. But hey...we are living in a world of sharing and instantaneous communication! There are 2 main reasons I do so:
Nothing but lots of benefits to me. No i don't charge anything because I believe a trader should make money from the markets and be generous to others in terms of knowledge. But if I write a book or course and put it on Amazon or something, one should definitely charge something because human psychology still loves expensive stuff which brings credibility to the author if it is in a marketplace.
Time to look at some charts and listen to what they are telling us.
You might want to set up charts like the above so you can see multiple time frames like I do. I know some traders have 10 different charts or more but I keep it simple. I got only 2. But that's good enough. The daily chart shows me a possible setup, like in the chart above we can see how Apple made a bottoming tail. Then on the right hand side bigger chart, it shows me the 15 min chart of our beloved Apple. Once it trades above the box and the 15 min 20 MA and 50 MA, I might consider it for a trade.
I don't know about you or other traders, but whenever a stock drops to its 20 MA or 50 MA in the daily charts and form some kind of bullish candlestick pattern, I really want to pay close attention to it. Then by zooming into the 15 min chart and making trades from it, one can really find a great trade that brings a risk reward of 3-6 times.
Here's a summary of what the charts are telling us:
May 06, 19 06:04 AM
Technical analysis of the US stock market with coverage of futures.
May 06, 19 05:46 AM
Step by step technical analysis of the KLCI Malaysian stock market.
Apr 22, 19 06:55 AM
A technical analysis of the US stock market. I go through the major indices of the US market and see where it is likely to go.
Apr 22, 19 06:47 AM
Technical analysis of the Hang Seng. Learn how the Hong Kong stock market is doing and where it is likely to go.
Apr 22, 19 06:36 AM
Technical outlook for Malaysia's biggest market cap stock.