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Ep 26: Learning the Tools in the Stock Market

February 26th, 2015

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It is February 26 2015 and welcome to the Rapid Recap. I’m Sasha Evdakov and today we’ll discuss some stocks and then we'll also talk about some learning tools or tools that you use on a day-to-day basis.

In this Rapid Recap I want to start right away and just get into the mix of some stocks. Today the market really has not moved to in any one way or direction on a large level. So it hasn't moved up majorly and it hasn’t move down majorly.

We basically moved 10 points which is nothing major in market terms. Now of course over the last month we have been trending higher and we have, we have been moving higher but there's not a lot of gas there's not a lot of energy that's feeding into the market.

That doesn't mean there aren't stocks out there that you can trade. That doesn't mean there are little things that you can find that are moving well, whether that's to the upside or to downside. There's always going to be stocks that are out there that are moving. There are always little nuggets that you can find to trade.

Question is do you really want to look for those nuggets or maybe you don't, really that just comes down to personal preference. I'm going to start with some stocks here and I’m going to try a new little format with some annotations and we'll see how that works out.

Let's talk about some stock, some stocks that we talked about over the past couple of weeks and then we’ll also get into some new things on some stocks that I caught my eyes.

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Let's first start out with BMR. BMR, its kind of creating an ABCD structure here from what I'm seeing. So we have a swing high over here as an A, then the B is over here, C is over here and the D could go down over here.

It's already starting to break this line of a support and you can see that it's doing it on heavier volume. Take a look at that volume spike right there and you can notice the one previously as well has been moving up so this to me is conviction. Now this A to B is sideways, now if you do decide to enter the stock right now or it's really coming into that approach.

If you do decide to enter it right now the projected move is typically A to B is also the C to D, so expect the same distance there on this company of course volume is picking up. So watch for a couple of those kinds of things as you decide to enter that stock.

We talked about our ANIP  in the past and the stock has been moving well and it’s still holding up well but again today not a lot of action, not a lot of movement just consolidating and just you know moving sideways and then it popped higher and then move sideways again so now we're moving sideways.

Same thing but it is holding up well after consolidating for quite some time right here so this one, we did talk about it great win for many people out there.

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We have TRIP, really is been doing really well since breaking out here at this like mini little pattern right there that's been created and it's been doing really well. This stock had this huge massive volume, of course you want to be careful with those gaps but the stock has been moving well since this break, your entry point would have been right there continue to move pretty well and this one really was similar to Buffalo Wild Wings a while back.

You can see this flag pattern right over here, with this flag pattern here again your entry point could have been here, it could have been here, it could have been here. You could’ve got in the stock four to five days later and still would've been fine because the trend line, the movement you know you're looking for long-term moves 190 from 160.

That would have been phenomenal and great move but the vision the view on that chart looks the same it’s a flag pattern.

It consolidated for a few days and if you take a look at TRIP kind of close. So just something to think of and take note on because patterns, learning the patterns this is a tool and something that you can use to get better and learn to spot things and then whether you decide to use that tool in trading or you decide to use that tool on something else then again you have to make that choice but you got this tool now flag pattern.

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Now you get to see when you can use it. In this case there's the flag pattern you had the opportunity still continuing and still working really well, alright let's take a look at MasterCard.

MasterCard had some really good moves. I wanted to short the stock back here and I did attempt to shorten it actually right here but we don't get enough I had to exit my position then I quickly flipped my decision after the stocks started popping right there in this region so right here was the longer entry point, we then came back higher pushing against the highs.

I talked about this in the critical chart members and those that wanted to get in it, again there was your entry point and the stock ran pretty good now we have a light little retracement and it could come back to this line and bounce. So watch this support line right here if it comes back to it and bounces at this level then that's what you're looking.

If it sells off that I would be out of that position in terms of the stock because  you don't want it to go past or beyond 90 otherwise you could see lower prices and it can get down eighty-five it could get down eighty so watch how it comes into this level right here at the ninety dollar level.

Next one is BAC this one had some action. This one had a few A to B and B to C patterns previously so here's the A to B, B to C and C to D. Now what's going on with this is that the stock has consolidated for a little bit of time so we're kind of moved sideways here for a little bit and now that stock is pushing the lower and look at this amount of volume that we have coming into that stock.

Its heavy amount of volume 160.9 million shares which is one of the largest traded stocks in the stock market. If this one are continues moving lower you could see it coming back to a lower level right over here possibly this region the fifteen dollar level so you want to watch it because you also have this gap over here out that it could try to come back and fill even though it's a small gap, it is a gap.
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The next one that we’ll discuss is AMCX this one’s popping higher on a heavier volume today so you can see this major volume spike right over here that we have and of course the price reflects that. Now we did have a slight consolidation here it's almost like a little triangle pattern that went on right there and the stock has been moving really well today nearly three times the average daily volume.

If we take a look at the weekly here you can see that it's coming into the approaching this seventy eight dollar levels so when it gets to this price level at 78 over here we want to make sure you take some profits for sure because if you don't the stocks have a tendency to possibly hit these highs and then sell back off and retest other levels so always be mindful of where the stock is going into and what it's going into and with how much strength it's going into, that's what you want to watch.

Next one we’ll take a look at is YUM. Yum, we've talked about a couple times, we talked about this one just because of clearing this with this gap and I mentioned it before where this gap is something to watch and if it clears it could be a nice long opportunity and there was your long entry point.

It was been a good stock to continue running further then I said even if you missed the trade this would be a nice opportunity right here, past this point so if you missed it then there was your entry point and you still possibly could nibble some right now depending on the action tomorrow so by now you're already getting a little bit later because the primary entry point really was right around this region. So this is the region that you should have entered it in.

Now as we approach this the weekly over here and you can see that it's clearing this weekly level right here and of course it's approaching this level and what you want to watch is if it gets into this level then you want to watch again just like the last stock that it has the potential to come up here and it potential to sell off a little bit just because you have all this overhead supply over here that was created.

Take a look at that volume, take a look at this volume there's a lot of supply over there are on this stock so always be mindful even though it's moving really well right now and it may get up to here it could sell off after it hits those highs.
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MCD, McDonald’s moving really well. The stock has huge heavy volume coming into the stock. We're making some great action on it. We got two major bars right there we have the big boys stepping in. Here's the support resistance lines, here's another one that got cleared earlier if you were lucky enough to catch that one but you can see that the stock has major conviction over the last two days and it's powering hires and pretty good investment for the long haul.

This one also has been, right here we have some highs at this level and this is another level to watch where the stock has the potential to hit those highs and sell back off. So you can see that a lot of stocks are starting to play the same kind of game where they have previous highs that could come in and sell back off.

Right now you could play this to the upside and be mindful of these higher highs and if these stocks break through these highs you could see them going much further but you got to make sure they break through them.

If they don't get through them then you could see some trouble and some more selling, if they do get through them then it'll make things a lot easier because you'll be able to run a little bit longer but of course you want to see it on heavier volume.

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Let’s take a look at Apple here's our daily chart, this line was a critical line resistance, the stock popped higher. Right there was your entry point, nice heavy volume. Stock continued to move and there was the upward pattern if you are following the trend line you know you could have used this trend line and exited it right here at this point if you were tight on the stock, if you weren’t tight on that stock you could just use this line right here as the line support or exit or as a stop because you need stocks to give them some wiggle room.

If you don't give them some wiggle room then you'll get stopped out very quickly and this one just had two days of pullback and right now it's trying to push higher so it kind of came back to a fifty percent level. If you want to talk about Fibonacci level it came back to a fifty percent level and now it's trying to pop.

You’ll get to see over the next day or two what really happens with the stock especially if they can make it past those previous highs right there at that level so again another one to watch if you’re not long this stock right now then always be mindful of these pullbacks when they happen because those are your entries.

It would be even better if it came back fore an adding opportunity to come back to right here and then bounced so that would be batter but I don't know if we’ll get it because this is a very powerful stock and we also have some are great volume right there that came into the stock.

It’s a monster company and its a monster stock and people love it they get emotional with it. Me personally I don't use Apple devices or products, I don't care for them but the company is a powerful company so you trade it, you invest in it and that's all there is to it, make your money work within the company that's what you do.

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Cracker Barrel is the next one I want to target and this one I've been watching for a little bit it did surprise me that it made this huge little pop right here but that really showed you some conviction. The second and third day follow-through is also a great sign.

If you're watching this one congratulations to you I missed it, I missed it actually right there by the time I noticed it it's already second and third day and for me I don't like to chase the stocks because I like to prepare for them ahead of time but your entry point would've been right here, right around this level you probably could have entered it here on the second day even early.

By the time I looked at it it was already gone and for me you could enter a nibble or little position if I wanted to but I don't like to chase stocks it's not my thing but this one has been moving very strong and in general it's quite stable. If you look at the overall long-term picture, Cracker Barrel it's been quite healthy so looking at this longer picture on the weekly you can see here we have on nice upward pattern we have sideways action almost.

Think of it kind of like a bull. Here's our bull pattern that's kind of been created and then it broke that moved higher, pulled back, powered higher so it's been very strong. It’s not a choppy stock it's not one of those in the past that have been chopping all over the place, the trend line is quite clear it's been heading higher and it’s a stable stock in that sense.

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Finally the last one we’ll tackle is NSP and this one… Let's take a look at the weekly. This one the weekly just look at it, it's been moving really well and we've we looked at the stock a handful of times so just continue to move, previous highs were over here and you can see that the stock has been powering higher beyond those.

It did attempt to come back and retrace to those levels right here and it came back to those levels, popped higher and again with higher heavier volume, here's a volume right there, here's the volume right there, stock continued to move well and if you got in it right here perfect, if you missed it and you got in it right here on the bounce even fine for you, all of it would've worked just fine because you still would have made about twelve dollars on that trade in just a few days, few weeks actually.

If you look at the daily here's the opportunity so you had a couple of days there too enter it so you could have entered it here on 122, if it pullback you could've entered it after that bounce and then continue to move higher so again now we had a little consolidation pattern right here and now again the stock is starting to move higher again. Little pause, moving higher, little pause, moving higher that's what you want to see and so far moving well and looking well.

A couple notes on charts, on patterns, on all this stuff, just the tools in general. You get tools as you study, as you build experience, as you gain trades under your tool belt you get these tools. You have a lot of tools at your disposal. You can research companies, you can do technical analysis there's a lot of things that you can do but only certain tools are going to be right for you.

For some people they like working with the hammer, for other people they like looking working with that screwdriver, for other people they like looking working with a chop saw. Everybody's different and your tools the ones that you like working with you need to determine these things.

For me personally you notice that I like working with simple clear tools. I like simple clear trend lines, I like simple clear volume, I like things simple, I like things simple to the point to the fact that I don't want to complicate my life anymore because the more things that you have going on screen the more tools that you have available to you, the more you’re going to try to use this one that one that one that one or they just end up sitting there cluttering your toolbox.

I don't like that, I like clean neat things. So for a person that's into lets say woodworking you have specific tools at your disposal and you don't need all these other things to create a nice piece, instead you need a few really good tools that you're really good at working and that's what you focus on.

For you if you're a Chartist, if you’re a technical analysis person and you like working with let's just say moving averages then those are the things that you should stick to and focus on because you could've gotten in like let's just say on this stock when the moving average breaks you could've gotten in it right here and when it breaks on the other side then you get out.

Let's just take a look at a different example, let’s just look at TRIP. This stock for example had a few different crossovers on the moving averages. So this company, it went under the moving average right around here and you could have rode this short all the way until right here to this point.

Then again you could've went short on it right here because it went under the moving average, rode it short all the way here and you could continue this pattern. So you have to determine which tools work best for you and not every tool is going to work great for you.

If you're a trend line person, if you're a volume person, that's what you going to focus on and that's what you got to use but if you're the type of person that has 50,000 tools in your toolbox and you don't know how to use any of them properly then you might want to step aside.

You need to learn one or two great tools and stick to that systems, stick to those tools because what a lot of people try to end up doing is they try to trade options, Forex, commodities and everything possible and they're not great at any of them. Focus on the tools that you're good at or create those tools and just continue to get better at those things and once you get better then you'll be able to capitalize on being faster at looking at charts, being more profitable and just having more success.

I just wanted to share a little wisdom with you about your toolbox. So you need to build your own internal tool box at the tools and strategies that you're good at, the tools and strategies that really you enjoy using because those are the things that you use over and over again.

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For example this pattern is kind of like a little flag pattern, this was TRIP, you know did the same exact thing as Buffalo Wild Wings Over Here so I have this tool at my disposal a flag pattern at my disposal and how I trade it is up to me and right here you can see its paying off and that's the thing is when you have the tools when you use the tools correctly, they pay.

When you have a bunch of tools all over the place you have a lot of those inventories, you have things standing that aren’t always working in your favor they're just collecting dust, and they’re collecting dust and not doing anything.

I hope this was a little insightful. Thanks for sticking with me. I just wanted to really share some stocks and this week that was kind of my goal, my plan. I’ve been playing around with some of the final course wrap up and just doing some final checks before we get the technical analysis course wrapped up but got some great stuff coming with it for you and even some free thing so on keep an eye out for that.

Probably we’ll try and get that out within the next two weeks I hope whenever the manufacturing comes through we’re doing a final batch but everything else looks pretty clean.

Thanks again I hope you enjoyed this video and I'll see you next time.

Author: Sasha Evdakov

Sasha is the creator of the Tradersfly and Rise2Learn. He focuses on high-level education speaking at events, writing books, and publishing video courses on business development, internet marketing, finance, and personal growth.

I'm Sasha, an educational entrepreneur and a stock trader. In addition to running my own online businesses, I also enjoy trading stocks and helping the individual investor understand the stock market. Let me share with you some techniques & concepts that I used over the last 10+ years to give you that edge in the market. Learn More

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