Although these Questions are few days old and alot of fortunes changed dramatically since last week, many of these levels remain actionable and require ongoing analysis.
There are 3 main buying points within MatrixCV framework on Daily chart :
- Breakout from base or formation (box), or breakout above support/resistance line. Daily candle has to close above the line, thus producing Buy Signal. Put 'stop' order to buy few cents above the high of Signal candle.
- Retest of breakout, or return to support/resistance line from above. This happens because "price has memory". Often, after breakout occurs and price rises strongly for days and /or weeks, eventually it will encounter overhead supply, selling will overwhelm buying and price will come down to about breakout price. Look for Down Day or two with high volume, followed by Up Day that will close higher. That's your Signal. Set 'stop' order to buy few cents above. Alternatively, you can just buy At The Market as the price falls into vicinity of your Line - really, the stock just recently broke out and rallied hard - it already proven itself. Also, if you happen to miss the breakout, this is your chance to buy close to that price.
- Retracement to rising 50 Day Moving Average. When stock breaks out of formation or above established support/resistance line, it is expected to develop a rising trend lasting months to years. At this stage it will not be making many boxes, but it will return to 50DMA every couple of months (or so), providing additional buying points along the way, as well as helping to trail a protective 'sell stop' order. 50dma is one of most widely used trade triggers, and often produces violent reversals.
Remember, that all this geared towards Bull market - price above 200 Day Moving Average and making a succession of Higher highs with Higher lows. When buying in ongoing Bear market (hoping to catch a bottom), bet in halfs or wait for better days.
1. "META potential buying point @183?"
Facebook suffered devastating 25% drop in February, after going under 200dma. Ever since, it remains firmly in Bear market, unable to take 50dma. It underperformed S&P during this summer rally. July and August attempted breakouts at 172 hit resistance at 183 - this zone had been a support in April and May, and important to watch. Buy over 183, yes. Stop under summer lows.
2. "ABNB potential buy 120?"
ABNB chart looks constructive since July, although still under 200dma. The resistance seems to be in 123-127 area (lets call it 125). Relevant support now at 105ish with established support/resistance line and 50dma.Whatever you saw at 120 will look even better over125. I have half position in simulator, bought on July 29 at 110, just as it broke above minor high and 50dma. Now price returned to it from above for retest. I will either buy another half somewhere here or be stop out under 100. Original stop was under 86.
3. "SHOP buy @ 42?"
July-August rally in SHOP was impressive 50% advance that failed spectacularly on August 11. Since then, price returned into the box and sliced 50dma on the way down like it wasn't even there. 40 area remains as resistance and still can be used, but 42-43 is better to be sure. I bought half position in simulator on August 3, just as it was advancing over 40, and sold it today for 20% loss. Original stop was under 30.
SHOP (and many other charts of similar look) seems to be walking thru the Valley of Death - bumping around the bottom after falling from the cliff. Even after 50% summer rally, SHOP was still down some 70-80% from the top a year ago. Many traders who still keep such stocks will be selling them in October- December for tax-loss purposes. And then this could happen:
4. "ONLN buy @38?"
Looks to me like over 37, and if 32-33 lows hold we may get it too. I bought it in ETF's simulator on 8/3 at 37.38, down about 7% now. Because breakout failed 3 days ago, when price dipped back inside the box and still under 200 dma, I will not be buying touch of 50dma here. If price reverses up and rally above 37, I don't have to buy more at same price as before, but you might (since you don't have any).
5. "ETSY wtf?"
TF is about 80% rally off the bottom, but the stock is still like 70% lower than at the end of last year. Impressive bottoming action, outperforming SPY all summer long. Stock broke out at 90 on 3rd week of July and immediately had a backtest, but it was so quick - if you blinked, you missed it. Ensuing rally reached levels not seen since beginning of Ukrainian war and reversed. I'm waiting for 50dma or revisit of 90 level to take a stab at it, especially since I sold SHOP and don't have anything of On-Line theme in Stocks simulator.
6. "CRM buy @ 186?"
The same war shadow as in ETSY above is actually observed on many stocks, including very important, highly connected and generally mysterious CRM. The problem here is 192 level, especially with two nasty reversal candles on June 9 and August 8. I see your 186 level and I used it when I bought half position into simulator on August 3 at 190, but evidently this purchase was premature. Hoping that 50dma will halt the decline, otherwise I may let it go. Stop now under 160.
7. "URA buy @22?"
URA has been basically sitting sideways for better part of the year, and yes - 22 is the level. Recently, it broke above 20, and now retesting this level and 50dma so perfectly that buy stop can be set today. This is the setup: price touched 50dma two day ago on biggest volume since breakout above 20 on July 27 (panic). Yesterday it painted a hammer (reversal). Today it rally hard and closed above 50dma and the line. Set Buy order on Stop at 20.39 (few cents above today's high). Stop under 19 and under 17.50 for sure. I bought half position on 7/28 at 21.13 (a day late and a dollar too high). Using described setup to add second half.
8. "GILT at 7?"
Interesting company. You know it's a foreign stock, right? A bit above 7 is the line going back to November last year. Reversal at this level (again) and rejection at 200dma (again) is concerning, but worth watching imo. Tiny 6.34/5.90 summer box produced decent rally, that seems to be correcting similarly to other stocks. Same game plan - catch it at 6.35 or 50dma... or wait until 7.15ish is dealt with.
9. "TAN too late to buy. 80 & 85 seem like good points?"
This is a feature of leading stocks - they are ALWAYS too high to buy. People chase... and drive the price even higher lmao. In this particular case, party is just getting started. 80. Yes. Little lower - may be 77, or touch of one or both moving averages would be nice. I got a half and looking to buy more, because it's above all ma's and just made new high of this move - It is a Bull market in Solar! If I wouldn't have any, I would buy half 'At The Market' now or on 'buy stop' at 85.05 (just a touch above todays high). In case if TAN comes down some more over next couple of days, I would still fix buy order every day for a spot few cents above previous day high. Stop under summer lows and definitely under War low.
10. "RUN at 34?"
This Solar stock been beat up alot, losing money. Technically, you can draw several lines thru it. I see your 34. The only thing I'm sure here is the stop - under 19.
11. "NOVA at 28-31?"
Very similar to one above. 31 - yes. 28 - maybe 25 is more actionable, in fact you can use it as buy stop today! You don't need to buy both - too much for one portfolio. Same game plan with stop under 17 and War low for sure.
12. "IYR not sure"
And you are not alone. Generally, IYR and XHB are the tits of this domestic economy. 100 is the ticket, but we may have to wait on this one awhile longer. Watch that 50dma for now, maybe it will hold.
Programming note:
All posts about MatrixCV trading method can be viewed by selecting MatrixCV label on right sidebar,
or by going to MatrixCV Landing Page on top menu bar ,or here:
https://ibergamot.blogspot.com/2022/07/landing-page-for-matrixcv.html
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