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Ep 48: Alignment of Multiple Signals Within Your Stock Chart – Rapid Recap

August 6th, 2015

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Hey it’s Sasha Evdakov, it is August 6, 2015. Welcome to the Rapid Recap. Right now it's actually 11:50 in the morning probably by the time this recap comes out I'll be around after noon 12:30 to 12:45 and we're actually over here in Canada so I'm trying to get this recap out before we go out on the boat or go for a hike.

We've been doing some fishing here on the lake been doing some kayaking canoeing just relaxing here over in the Ontario near Ottawa area. That's kind of what we're doing taking a little break,  taking a little vacation but that doesn't mean you can't look at the market that doesn't mean you can't have positions in place and that doesn't mean you can't be prepared to take action when things break one way or the other.

Looking at this week's recap what we're going to cover is the Alignment of Multiple Things with in your Stock Chart so what I did actually a few days ago while we were on break and while we were on vacation was still taking a look at some critical charts and I posted a handful of charts because things have been setting up quite well in the chart space so I wanted to share with you some charts and there was 21 charts that I have posted and again even though this week we posted 21 charts just a couple days ago that doesn't mean the charts from the previous week or just to three weeks ago don't apply.

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Even the charts that are two three weeks old some of the support and resistance line still can apply today. Now looking at this chart right here, you notice we have the Apple chart and we’ll be going over that and you notice that we've been talking about this one from multiple months and this is kind of the freebie chart on the website right now but we're going detail with Apple because it's a popular company and it's one that a lot of people watch so will cover this right here actually in the Rapid Recap.

Now, before we get into that lets take a look at the overall market and how things are doing. Right now currently were down a hundred and eighteen points as I’m recording this probably a little more we were down at 137 earlier as I was watching things but really you can see some selling pressure coming in and we’ve talked about this over multiple recaps talking about how it's been hitting that resistance line, talking about how there's this sideways action and prices that are moving sideways that's happening.

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If you really look at the S&P which is really what more the professionals look at you can see that again this one we've been moving kind of sideways since March and we've hit since about mid-May to about July we’ve hit those highs a couple of times. We've actually hit them once right here to create our initial resistance point, second time almost hitting them there and a third time right here.

Now we're selling off again right now but we didn't even reach the highs so that means there is not enough energy to push that market higher but we can still come back to this 200 day moving average right here and the stocks can bounce otherwise we're watching this critical support line or even these Lows right here.

Always be mindful right there of those areas where we can get bounces because you don't want it to whipsaw you around.

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Let's take a look at some individual companies and the first one I want to look at is ABMD, looking at this one you can see here we have our resistance line right here that was moving as we zoom in we can take a look and see. Let’s see right here you can see the stock broke out right here on pretty good volume take a look right there stock bounced powered higher continued and followed through.

Again we had nice influx of volume coming in right here stock continued moving high I wouldn't chase it here. I would more or less look at this line right here for a pullback or sometime where they pull back a little bit if you're interested in getting in but otherwise if you got in this one a little bit earlier then you definitely want be taking some profits into strength.

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Next one is USCR, this one again we had a sideways consolidation pattern stock broke out, stock came back to retest that break out right here which it took about a week to do and then again it powered higher. This is what stocks do they move sideways they consolidate they break out they come back to retest those lines and then power higher so that's what you are watching on this stock and the stocks’ moving well.

You can see here on the weekly with USCR, it’s exactly what it did. It's a classic pattern whether you looked at the stock trading foundation course, the technical analysis course they all talk about these types of patterns, and movement even just some basic technical analysis and understanding you know that stocks don't go up in a straight line.

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This one you can see broke out came back retested things and powered higher. Take a look at Apple here briefly and we'll come back to this one you can see that here we've talked about this one for multiple weeks actually multiple months that this stock it went sideways for quite some time.

We had our first swing point here in terms of the highs of this consolidation pattern second one, third one, and fourth one each time that stock was being rejected and each time the bearish volume was increasing told you be careful right here the stocks can bounce but notice the resistance coming in right here on this 20-day moving average, tock continued here's your break this is your safer entry point.

If you were watching it closely really you could have entered it right here as you saw this rejection but normally this is your safer entry point right there for the shorts. We had a little bounce right here which the shorts take profits on but now again today you can see there's a little bit of redness little bit of bearishness coming in. What can happen is we can come back and retest this line right up here.

We can come back to this level so that stock can come back retest this line and then reject it because right now it’s acting weak in terms of bullishness but it’s acting very strong in terms of bearishness. So the selloff is there it's been working for multiple months I’ve been talking about it so go ahead and review those previous recaps those previous chart because they've definitely been on the website and in the recaps.

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Take a look at TAL, this one we want to take a look at the weekly chart so this is similar to what's happening with Apple actually. You can see what happened was the stock broke right here we have this consolidation pattern and then it broke that pattern right there, came back to retest that line and it rejected it and then the stock continued lower so you can see that here was our sideways consolidation pattern or you can draw a diagonal pattern in either case we're moving sideways we're watching this line of support and resistance if you draw it on the daily here was your line, that stock then came back to retest that resistance line and then sold off so it sold off, there wasn't enough power, there wasn't enough juice not enough energy to take it higher came back again retested it and rejected it, came back again and rejected it.

That's what stocks do that's what they do in terms of movements the way they act and the way that they behave.

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Next stock SABR,  Sabre corporation has been moving pretty well if you look at the daily we zoom in, here's our a resistance line and now it's becoming support, stock broke out, we have nice solid heavy volume right here coming into the stock. Broke out here came back kind of retested it right here but so far holding up really well if you're in the stock are looking to get in it watch this lower part of this line as your stop because once it breaks there more weakness and selling pressure could come in.

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We got CCE this was a consumer defensive sector Coca-Cola. Long-term good holding stock so overall look at this line of support and resistance you can see that right here we have this swing point right here hitting it a couple times and the stock broke out right here and powers higher. If you really look at this stock on a monthly basis you can see here we have the A to B, B to C, and C to D pattern and now again we consolidate after the C to D Leg finishes, something happens in this case we consolidated, this could be our A to B, B to C and we could have another C to D Leg right there. Let me draw that out for you.

Here we delete the drawings this could be our A to B, B to C, moving sideways and then C to D moving to the upside ok so these patterns do repeat  just remember after that C to D leg you want some kind of consolidation or you want some kind of pullback otherwise you’re just powering up too strong too fast but this one looking at it overall breaking the swing highs right here looking good for higher prices at the moment nice solid volume coming into the stock and you can see that right there building all these different volume spikes that are coming in and a huge break in price as well, looks good and moving well.

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Disney had a little trouble here, you want to watch this level it can come back to this level at least more than likely cause we have a gap right there anytime that there's a gap with in the stock that's usually a little bit of weakness but overall this is a fairly defensive kind of company that if you're interested to play for the long term or even invest into a children's account you know even buying 5 – 10 - 20 shares it's one of those kinds of companies that could be good for that however you want to be patient because when stocks fell off from the highs if you have a stock selling off from the highs this quickly with this much volume.

You want to be extra careful so let things digest it may take a couple months but if you can get it may be somewhere around here watch how it comes into this line into the $95 level or even at this 200 day moving average. Watch how it holds up his chances are it's going to bounce to about 110 play around and then come back and sell off a little bit more.

That's what stocks do they don't go straight down, they don't go straight up so always be mindful be a little patient and wait for things to move a little bit of sideways somewhere over here in the near future and then once it consolidates pauses that's when you want to either get in step and so forth but right now the stock is having a huge day on selloff.

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Similar to how GMCR has been doing for months we've been talking about this one for months doing pretty poorly really have been looking at this one right here the stock broke there and rejected that inner trend line so we had the rejection right here. Stock came down and came back up rejected higher prices sold off and you can see that it's been moving at all these different swing points we’ve been clearing them even right here. Take a look there's a swing point right here and if we zoom in on the daily you can see there's your daily bars and there's your support line stock broke and came down.net

Now we're getting into the weekly and you can see the stock continues to sell off more and more so since the one fifties this stock has been sold off hundred-point and it can definitely be because it broke this level it can definitely have potential to get back to the $17 level you know a lot of people they get too attached to their stocks similar to Apple and they think oh well you know it's Apple, it’s a great company it's a great company or a GMCR it's a great company you know… Everybody drinks coffee but the reality is looking at these stocks can they still come back to that 18-17 dollar level?

Absolutely, same thing with the other big companies we have Tesla. Tesla is another huge company here's our weekly chart you can see here we created a double top, here's our double top stock rejecting it and right here we have a trend line stock was moving higher retesting that level and now if you look at the daily if we just take a look at the overall daily picture and we get a little tighter on our trend lines. You can see that this stock powered higher after it powered higher we had this rejection there's our double top it retried it a second time and still rejected failed to go then we had a little bit of consolidation really that's what it was doing was it's moving sideways right here and then it broke it right here.

Now we're down to 27 points all in one day or 10% so the question is can it keep going lower? of course it can keep going lower we can we can come back right here to this level 50 percent level to retest that’s the Fibonacci. We’ve got fifty percent you can come back right here to do a one to one and then it would start moving sideways. If you start looking at this on a weekly chart you can see that coming back right here to 185 would still make it a fairly great looking chart you know still look very clean in terms of the overall picture of that stock.

Be mindful of where your stock is and don't really fall in love with it. Watch the price, watch the action, watch their behavior, and how it's moving.

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Netflix has been doing pretty well since the split here. We had this resistance line stop powered higher, another little consolidation powering higher. Netflix, from what I found always moves in a stair-step pattern so if you can catch one of these consolidation patterns on like a three-day chart or weekly chart or two-day chart even a daily chart but on a daily chart it looks a lot more messy but if you can catch one of those you pretty much ride it on a stair step pattern.

Right now it's a little bit overextended so we have a little pullback but if you're looking to get long into the stock if you can pick it up right here you know 116 that could be a nice place use that as a stop or even at the 104 level here because we have that gap right there, filled a little bit but I don't believe looking at it it's not fully filled so there's still some area of weakness just because it's been running up so quickly so fast.

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Finally I want to get back to the Apple stock. One thing I do want to mention to you is that you want to always watch for things in alignment when you're looking at these stocks and these charts. A lot of people they always look at one thing specifically they look at one thing and they make their decision rather than looking at the big picture. Now if you've been watching the Rapid Recaps time and time again I've talked about this stock and I’ve talked about this here's our A to B, B to C, and C to D pattern and now we could be creating another little leg down whether this is another B to C Leg, for example another slight little pullback and then we power higher or it can come back and you know retest levels back here and stay there and isolate there.

So we'll see time will tell but you're always watching at how that stock is moving and because we've always had this A to B, B to C and C to D, now we're starting to build that next leg down you can already see that it's a little pullback.

Now we don't know if it's going to be a full retracement or a major pullback, just because these things are unpredictable but what you do know is that once you hit that projected move of C to D, you know that something new should happen whether that stock’s moving sideways whether that stock’s pulling back and already because it's not following this trend line, that trend line was broken you can see. That means that there's some weakness in the stock so you're always preparing for what's next and you're looking at multiple things.

When I'm trading, when I'm looking at these stocks, when I'm looking to get into these stocks I'm not looking at one thing specifically I'm not just looking at what's happening right here with these last two days or these last two things rather I’m looking at everything, I’m looking at what's been doing in the past on the monthly. I'm looking at overall how is that stock moving and behaving. How does that forest look does that forest look healthy or does it look weak, does it look cut down, has there been forest fires?

I’m looking into what's going on more recently you know what's been a strength, what's happening looking at it on the weekly and I’m looking and checking out the daily and now this is more of what what am I going to do with the trade you know now that I've seen the big picture what am I going to do what's happening what is it building for.

Here looking at this support line you can see we were waiting patiently and I've talked about this one multiple times just go and review the recaps we've looked at this level right here we've watched the come back to this level and we talked about it in the critical charts too for the safe play wait for it to clear here now if you were a little more aggressive if you have experience you definitely could have been trading it up here but really I always try to cater towards people on the safer side and right there that was your safer entry once it broke and you can see that looking at it after it broke that level broke the 200 day moving average and a trend line.

Now we have two things in our favor so we have this trend line right here this is our trend line that's one thing in our favor, the second thing in our favor is we have this 200-day moving average that was also broken. Look at this point right there where it was broken so that's two things in our favor, three things in our favor was it rejected this 20-day moving average right there, four things in our favor had rejections across the board at these levels so that's another thing in our favor and if we look at the overall on the monthly you can take a look at the chart you can see that are A to B, and B to C pattern  so here's our A, A to B, B to C and C to D it pattern was nearly completed.

So when I see that our pattern was nearly completed that means we have to have some kind of consolidation or we have to have a slight little pullback and then we can power higher.

We have to have something that's happening in order to digest this long move and to digest this long move because that long move, that first one here was our digestion period so the same thing we had a long move and we need another, digestion period and all these things looking at it all these things are working together.

If you apply this concept in terms of NASCAR or racing you know when you're at the pit when you're standing and waiting at the pit to get your tires changed to get your fuel everything everybody needs to work together in order to seamlessly get out of that racing pit because if any one person holds that in that racer up or the driver up then everything else collapses then the driver has to wait and overall the team doesn't get a good score, doesn't get a good lap, doesn't get a good finish.

The same thing here you want to watch all these things. Multiple things to work together if you apply this concept to a domino rally similar to how all the dominoes are stacked and you know when you push one everything falls together with time you know this one hit that one and this one hits that one. They're all working together but if anyone is out of place then it stops the whole motion of all those dominoes the energy stops.

The same thing here everything the whole system has to work together and if you apply it to the human body the same thing you have to have your digestive system working together, you have to have your mental state working together, you have to have you know all the pieces of your heart working together properly in order for you to survive and live.

If anyone piece’s missing it’s going to be much more difficult or you'll be dead in simple terms you just have to have all those things all those components working together in order to maximize the effect or maximize the end result that you're trying to achieve.

With stocks then result that we're trying to achieve is prediction of our stock and where it's heading so in here again we're watching how are multiple things setup so I'll give you a second example so here we have our weekly chart we’re looking at the 20 day moving average. You can see the stock is under the 20 day moving average right here.

The next thing stop comes up it rejects at the 20 day moving average. We’re also looking at the volume right here these volume bars. So even if we didn't get into the stock at this point right here at any one of these areas that's ok because there's always another set up there's always another trade and we're looking at this line of support. Now we have one thing in our favor we have these volume things in our favor that's two things. We have this support line that's three things and the stock breaking right here that's four things on heavy volume that's five things. So many things are in my favor in order to work for my predicted result or end games.

Again, you want to have multiple things working together in order to get your effect in order to get your end result and this applies not just to stocks but to everything you do into life into your health into your finances into your relationships you know if you if you're in a relationship and you just have one thing in common in terms of working together and the only thing that you have in common is that you like to go out and play basketball.

If you don't have the communication side of that relationship, if you don't have you know the agreement part the negotiation part you know splitting the difference chores if you don't have all those things working together that relationship is more likely to be doomed.

The same thing, multiple things in anything you do need to be working together in order to have a great successful outcome.

I hope you had a good lesson this week from the Rapid Recap we covered a handful of stocks again take a look at those charts be mindful and be patient on the market. Overall right now we're positioning more for the short side and that's where we're at especially with Apple over here and GMCR as well but remember that these stocks and any stocks really for that matter you can come back retest those levels be prepared and then roll back over so they played these mindful tricks on you during their movements, during the way that they breathe in the way that they behave.

You have to be knowledgeable enough and know them enough in order to spot these patterns in order to spot the way that they act and behave just like knowing your best friend you know whether they're going to show up on time or they're usually late. You know if they're allergic to certain types of foods the same thing with stocks once you know how they act behave how they move it makes things a lot easier alright.

Thanks again for joining me I hope you had a great week so far we're going to go out actually right now and go do some kayaking canoeing do a little woodworking here on some things and probably go take a hike. So we're in Canada but I'm still posting a lot of the Recaps, were posting a lot of the critical charts. Thanks again for joining me for sticking around.

If you have any questions feel free to email me about any of the things that we talked about if you're having trouble with support and resistance if you're having trouble about spotting ABCD pattern just go ahead either fill out the form on the website or if you have my email directly to send it out may take me a few days to get back to you but nevertheless I usually oftentimes do so.

Just make your question nice and clear and specific and if it's related to you know learning about your stocks learning about reading charts then I'd be happy to answer any of those kinds of questions so thanks again and I will see you next week.

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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This website and content is for information purposes only as Rise2Learn, TradersFly, and Sasha Evdakov are NOT registered as a securities broker-dealer nor an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Rise2Learn, TradersFly, and Sasha Evdakov cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Rise2Learn, TradersFly, and Sasha Evdakov in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Rise2Learn, TradersFly, and Sasha Evdakov accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.