By: Larry Potter
We got an interesting question from reader the other day and her question was " when you put out a consider buy at "X" price, does it matter what the 5 or 15 minute charts are doing at that time? " Good question.
If you watch the market in live time, you'll see that just about every move is pegged to some form of moving average or technical level. Maybe it's the 9 day EMA, maybe it's the 50 day SMA. Maybe it's the 15 minute candle stick chart, maybe it's pivots, or even fibbinacci levels. So, what does one do if we like the "XYZ" company at say $50 and it's approaching $50 on the daily chart, but it's getting overextended on the very short term indicators? What if we buy it at $50.03 just as the 15 minute chart shows it's time for a pull back?
We've often struggled with this very question, but have to take into account that more than 70% of our readers can't sit in front of a computer and trade all day, they are working folks. So, telling them to be wary of the 5 minute bar charts isn't going to help them much. What we found to be more realistic, is to put out a resistance area, and if the stock gets above it, take the shot, but give it some wiggle room to fade back, catch it's breath and move up again.
[Read full article]
If you watch the market in live time, you'll see that just about every move is pegged to some form of moving average or technical level. Maybe it's the 9 day EMA, maybe it's the 50 day SMA. Maybe it's the 15 minute candle stick chart, maybe it's pivots, or even fibbinacci levels. So, what does one do if we like the "XYZ" company at say $50 and it's approaching $50 on the daily chart, but it's getting overextended on the very short term indicators? What if we buy it at $50.03 just as the 15 minute chart shows it's time for a pull back?
We've often struggled with this very question, but have to take into account that more than 70% of our readers can't sit in front of a computer and trade all day, they are working folks. So, telling them to be wary of the 5 minute bar charts isn't going to help them much. What we found to be more realistic, is to put out a resistance area, and if the stock gets above it, take the shot, but give it some wiggle room to fade back, catch it's breath and move up again.
[Read full article]
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