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Welcome to the Rapid Recap I’m Sasha Evdakov, it is October 1st 2015 so welcome to a new month and this week's lesson is Watching the Intraday Action in the Stock Market to Predict Future Prices and Stocks.
Now if you haven't joined us before in the Rapid Recaps typically what I tried to do or strive to do is teach it like a lesson similar to how you would go to school, to dance school, to martial arts class you get a lesson specific and focused on a certain subject or an educational piece.
This week's lesson we are focusing on watching that Intraday Action in the Stock Market to Predict Future Prices so that's what this week's stock market lesson is going to focus on. Now throughout this lesson I will also share some stocks that I find that are moving and behaving or some popular companies but if you want to dig deeper into some of those stocks then take a look at the critical charts on the Tradersfly.com website.
Before we get started into taking a look at the stocks and markets I do want to let you know that I'm wrapping up some details with the Penny Stock Chart book and that should be coming out soon and we’ll also be looking at doing some eBooks for a handful of those stocks and we will be releasing those periodically more so towards the Christmas time.
What we will probably do is do some promotions for the eBooks as we slowly convert them into the eBook format but that won't be coming probably for another couple of months but that's kind of on the horizon here in the future as we approach the Christmas season and holiday season.
With that in mind keep your eyes peeled for the penny stock book which will be coming out in the next couple of weeks and have some great insight regarding stocks that are less than $10 in price.
Let's get into a few stocks how they're moving and then the market and as well as looking at the intraday action in the stock market to predict future prices. This week, the market's acting again slightly sluggish and we did have a few bounce days which was expected after the sell off there the previous couple weeks there that we've had. Everything basically started to kick off after that FED announcement and from that Fed announcement slowly we started to roll over and things have been acting sluggish and somewhat picking up speed to the downside.
We did get a few bounces from time to time but if you read that intraday action which is why I want to focus on the intraday action in today's lesson then you will understand reading the chart a little bit better but before we get into the full lesson let's take a look at some individual stocks and pop them out right here.
Here we have Tesla but we are looking on the daily chart and as you can see we're slowly rolling over. If you take a look at that weekly chart you can see that we came into this double top in a way or a resistance level, that stock sold off, tried to bounce and then again sold off in that region.
Taking a look at Apple similar concept we had a major resistance level right here and then if you zoom in on the daily you can see that this upward support line brought that stock a little bit higher. We attempted that break right here and then once we broke it we attempted to get back up higher but if you draw that trend line further you can see that it's rejecting those prices and then we continue to move lower as well as an increasing volume and the break was on heavier volume and then moving up part was on lighter volume.
If you take a look at that you can see how that plays out fairly well and fairly good on the chart and here is your resistance line that hit it multiple times, four times to be exact and multiple times if you're looking at it on the day to day basis but really there was many opportunities there at that resistance level.
You also have GoPro, doing similar movement to the downside. As you can see we had our initial break here at the resistance right here and after we hit that resistance we continue to move lower. Now if you miss that move you could have again noticed this break here at this support line which I talked about before and was in the critical charts.
You can see that break and nice heavy volume. You can see that bearish volume picking up tried to get up there and rejected it, sold off, popped higher, sold off again and you can see that if you would've sold it at that price or a short sold it you would be up five bucks thousand shares 5,000 bucks.
Let's take a look at Facebook and if you take a look at Facebook on the daily you can see we also had a nice resistance level right here that the stock came in and rejected it we also have a gap that was earlier created right here and then it was kind of filled in this region.
Now as we continue to move lower after rejecting this price level that stock continued to take off and now it's bouncing again on lighter volume so my estimation or my prediction is that as we pop higher here lightly in a lighter volume we will see how the end of the day action moves or works because we're still not finished with the day but as we popped higher here chances are eventually we're going to reject again because there's some strong emotions here on that sell off.
Now, Looking at the banks the last couple of weeks the banks really had a tough time so looking at all these different banks like Bank of America, you can see we had this B to C pattern that was created and then the bank sold off.
We also have Morgan Stanley which also created this upward support pattern and when it broke that support pattern we continue to sell off and as you can see right here we have heavier bearish volume whereas as we went up we have lighter volume so on that break you can see the difference much heavier volume right there.
Looking at each one of these individual stocks you're looking at the ones that are moving the fastest in the shortest amount of time and that's really essentially the goal and the banks have been moving really well and since we have Morgan-Stanley up on the screen we’ll probably just use this as an example.
For looking at the signs, the signs of looking at intraday and what happens within the day of the trading day to see how the stock behaves, I want to make sure I'm always first off starting out with a bigger picture so if you're bigger picture is a daily then you start with the daily chart on your trading platform.
Now, as we're looking at this daily chart I noticed this upward support line ok so the separate support line I'm also noticing how it's moving and behaving so this gives me an indication of let's say a mid-range term or a mid-range in timeframe how the stock is moving and behaving. As I start getting into that day-to-day operations or the day to day movement and I'm going to focus on the last week or so.
I'm not going to concentrate on the last couple of days just because we'll see how that plays out but as we look at initially how things move since the break I want to share with you why is it that you shouldn't be buying into these stocks even when they bounce and what I’m talking about here is often times you'll see a lot of new traders or beginning traders getting into stocks at these levels because we have green days and they appear like their positive signs and that the stock appears that it's moving up.
Looking at the longer term picture if you remember that the stock broke a critical pattern so if you weigh this you weigh the behavior that's fairly important that's fairly critical that it broke a major pattern so now we start moving lower so this creates an acceleration on that volume so that volume right there is 19.6 million. So even though the next day we bounced, we bounced on nine million shares whereas we went down the previous day on twenty million shares.
Twenty million shares went to the downside and then we had people that were either taking profits or scared the stock would jump it would take it to nine million.
If you compare this and have a battle one between the other day what does that tell you on a day to day basis so this day was 9-21. So what I want to do is look at that day, zoom in here we’ll do the 10 minute here and let's go to the 21st so here was our 21st, this was the day where the stock basically opened right here at 33-35 and it ended at nearly exactly the same price and we can confirm that as you can see it's a Doji so you can see the price level is very even its near where it opened up.
Going back into that ten-minute let's go back to the 21st so here's our 21st ok so there is there's the 21st from here to here this is the 21st. Stock opens and what happens to the stock? Well initially we gap up, because the previous closing day was right here. So initially we gap up and if we zoom out looking at this a little bit you can see that the previous day we had a major gap down and then the stock sold off. so we basically gap down right here there's our big trend line. Gap down on heavy volume and then that stock continued to move lower.
The next day we popped so that's what we're really going to focus on we're going to focus on that 21st of the day because it's bullish and this is typically where people get psyched out with these trades and really get burn they lose a lot of money during that time so what happens typically is that people get into this even if they were short they get back into it or thinking they're buying it for a long trade even and what happens is because you believe it's a gap up and because it's a gap up you think it's going to go higher but you have to remember the bigger picture so even though we gap up we do so on four hundred and sixteen thousand shares the next 10 minutes is 385,000 shares to the downside and then the next time after that we have four hundred and thirty-three thousand shares to the downside and it starts getting into back gap.
Look at the opening 10 minutes, four hundred and sixteen thousand and then look at that next four hundred and thirty-three thousand pushing that stock lower then again we attempt to go higher we get to this price level right here and once we get to this price level we go up on 119,000 shares but we reject it at a hundred and sixty seven thousand then we reject that the next 10 minutes a hundred and eighty six thousand so you can see we are rejecting at that level.
You’re starting to look for little clues of how that stock is behaving this is how its breathing how is it moving is it powering higher? is it moving to the upside with strength? is a telling you it's a very strong? or as a telling you that acting week. Basically every time we have a bounce, we have a sell off. So if you look at it again and let me zoom in a little bit so every time we have a bounce such as right here we have a corresponding selloff so here we have 20 minutes of a pop and then we have 30 minutes of a selloff.
Again we have forty minutes of a pop and 30 minutes of a sell off now again right here at this point level we have basically filled that gap and notice how that comes into that beautifully so the stock does bounce at that gap level because we have the day traders that are playing the stock and then they'll get into it taking that stock higher but then in one bar we take out nearly half of those gains so in the end what happens is if you draw a line across here's our opening price draw it across and our closing price.
Nearly ends exactly the same and then what happens to the next day stocks build energy so this was a building part. This part was building energy so that way we can continue moving in the way that the energy projects future.
If you zoom out we go back and you look at it that even though we did bounce right here and the bounce you could say was well 31- 45 - 57 cents that even though we did have a slight bounce and little gap this could be a little nerve-wracking because it's the first day that the stock dropped. We've really still focused in on the energy where is that stock heading? Where is it moving and what is that bar telling me. So you stay in your short position because it showing you weakness.
The next day we had continuation of that pattern stock opened higher and then closed lower the next day stock opened and popped higher but then closed again lower. Next day again we moved lower then again we get to a green bar and I want to evaluate this bar more so because if it's a red bar on a day-to-day basis and you just check your stock at the end of the day you would have probably kept those shares there but this is the bar that green bar right here is probably one that could have faked you out.
Again this is one where most people lose more money or get psyched out and you know get out of the trade. First off you have to do your due diligence and start comparing yourself. We went down on sixteen point eight million that previous day and there were a lot of trades but we popped on 13.8 million and on the day we broke we had 19.6 million to the downside.
Now if I'm still uncertain I want to watch the day to day action. The ten-minute. five-minute and fifteen-minute action on the stock chart and see how it was behaving so this was 925 so what I want to do is zoom in to that day and let's just do here again 925 so here we go. So as we start looking at it this is the time frame we’re really focused on and honing in on.
We're looking at how that day, that stock moves and behaves so if we look at the initial opening price here again that stock gaps up, that stock gapped up right there. It basically gapped up moved higher and then moved lower so with in that first 10 minutes let's see if we can even zoom in even further let’s just break things down maybe on a three minute mark if we can get to the 25th.
Five-minute mark the 25th ok here we go five-minute mark. So what happens here is that stock within five minutes powered higher and then sold off. That bar to me is actually a bearish bar even though it's green it tells me that it's weak because of the movement to the upside and then it continued to sell off lower than we had a few red bars had a slight little green bar few more red bars and a few pop on green and then you more on red. Now just looking at red and green bars doesn't really tell you what's happening behind the story
The first 10-15 minutes or 5 minutes is always going to be busy so we popped higher but then sold off on five hundred and sixty-three thousand shares so this was a greener bar then we had some indecision that bar tells me there's less people that were deciding. Zoom back om right here. Less people were deciding on the stock so 354,000 shares traded then we picked up speed and we have six hundred and twenty-five thousand shares sold off to the downside so if you compare that to the first bar 563 on the gap up but then that's not continues to move lower to fill that gap on six hundred and twenty-five thousand shares.
Then again we pop and we pop on four hundred and fourteen thousand shares and then we sell off on 394 very close to it now inter-day action is a little tougher to read because you know you're not always going to get full big discrepancies within the volume but then you're looking at it then there's 228,000 so 228 - 394 versus a bullish bar of 414 so if you add these together, 400 plus 200 that’s six hundred verses that 400 to the upside. Then you got another one that's three hundred and fifty nine thousand so looking at all this right here really to the downside you can see that the volume is in favor to the downside.
Now we do have some energy now to the upside throughout most mid of the day and this is typically short buying back their shares is typically people taking profits because you can see how weak this volume really is you can see how we start off with heavy volume to the downside and then we kind of level off there's a few people that get scared in here and then again we start picking up speed to the downside notice how this part accelerates.
This part right here starts to pick up, that's where we do the selloff here then again we start picking up speed towards the close and then we have heavy action to the short right here so there's your heavy short action.
If you're looking at it the next day what happens? we move lower and much lower so from here or even here move lower and you get down here so looking at all this really if you add it to your short at the 32-65 and got out just there that's basically an extra dollar gain from simply learning and understanding the tape learning and understanding how to read the chart, learning and understanding how the action the trades and the way things move really plays a large role.
Now if we go to let's say the fifteen thirty minute or so. Here let's do the fifteen-minute, the same thing is going to happen and tell you in the chart so you can see how this little bit of volume right here this this motion of volume plays a role and you have to remember that I'm looking at things in terms of right now a smaller picture. I'm looking at a small part of the chart whereas the rest of the chart has actually much bigger because of remember we already broke the pattern, the chart pattern and we also have heavy volume so this really take those two things are pretty big.
Now there's other factors that I also take care of and look at prior to making a trading decision but looking at this intraday volume just helps add a little more confirmation to my analysis where now if you look at this circle this is my probability my probabilities now are more and more in my favor, the more I'm learning the more I'm understanding about the chart.
The bigger the probabilities that you can get into your favor the higher chance of success that you have and you can do this by learning to read those tapes so again what happened the last couple of days now I said I wouldn’t evaluate these too much 'cause we'll see how things play out but once you start evaluating you can see that same concepts kind of play out.
Stock comes up rejects its, stock comes up to previous price over there rejects it and its rejecting right now. The day still didn't end its 3:30 here on the East Coast but you can see how these things are playing out in the stock so looking at these charts you have to start learning and understanding how this behavior of the chart or within the day affects your longer-term positions and you can do the same thing with you know bigger stocks like TESLA here so as you start looking at it you can see the behavior of their rejection and the pop that we get then again behavior that happens then again the slight pop and even though we get these pops over here the behavior will tell you something different.
If you look at Bank of America same thing look at this the way things play out that even though we had a few bounces to the upside the energy was pushing that stock lower and for those who study the green course or the technical analysis course you can see here if we draw a Fibonacci line all the way down you can basically see that it's coming into that 50%.
Now here's an interesting part even if you take out this little one day blip or that one day problem right here we move it up and that still gets us to 38.2 rejection and look how beautifully that works out. Look how beautifully all that works out for that stock to short it and you can do the same thing with Morgan Stanley.
The same thing here as you start drawing out your Fibonacci levels you can see how we start coming into that 38.2 and if we go down deeper this doesn't play out as well unless you start aligning a few things so this one didn't reach that 50% as high because of that one day blip that we had but you can see how it's coming in close and really playing around that 38.2% but if you take it to that primary level you can see how it really comes into that level beautifully
You can do this with many other stocks many other stocks like MTB. Same thing take out that Fibonacci and this is again just another guide, another tool and you can see how that comes into that 50% level multiple times. Now of course I covered this more in the green course and really what it's all about, about Fibonacci because you know getting it just from maybe a slight little small lesson like this isn't as adequate but if you take any stock looking at many different stocks and if you know and understand the swing points and the technical analysis you can really get an inside view of what these companies are doing if you look at it on that intraday basis to help confirm your analysis.
Alright, so that's the lesson for this week I hope you found it insightful educational and maybe something that you can use for the future. Remember that my goal is to give you some knowledge and tools that you can use for the long term and if you can use those knowledge and tools for the long term if you get one thing from this video then you can use it for the rest of your life it's like buying a book I don't look at a book as a $10 book that I have to spend or waste $10 but if I can learn one lesson just one lesson from a $10 buck or $100 book or a $500 report then I can use it for the rest of my life and benefit from it.
I can take those concepts from that book and continue to use it to improve my life and that's how I really look at things that's how I want you to start looking at knowledge and information and a lot of people what they do is they look at a chart and they look at it one way and then they don't apply it. They look at it and they see it but they don't apply it so when you look at a chart you always want to look at what is it, it’s chart then you dig deeper. What does it mean? What does the chart mean to you? what does it mean in terms of this trend line? What does it mean when these stocks are coming in here? What does it mean on that exact bar? What does that exact bar mean?
All these different bars they mean something and then what does it mean to you so how do you apply the trade? How do you apply your discipline how do you apply the techniques the trading methodology so that way you can prosper from it. That way you can make either some additional money you can learn from it to build your retirement whatever it is that you're using it for but how do you use it to your benefit for the future.
That's what it's all about it's about taking that knowledge and Investing it into the future. Investing is all about getting more from your input so whatever you put in if you put in $1 then you want to get $2 back or dollar 50 or more if you can so if you put one hour into reading a book into studying material into a video and you can gain and benefit and save yourself sometime in the future or you can use it to make an extra $20 in the future every single month then you win. So look at things in a higher level of higher purpose for the longer term and if you start doing this if you start applying yourself in these levels you'll see some greatness.
You'll see a lot of things open up to you looking at those win-win situations because I know that a lot of people out there they look at things very negative and they start being defensive about different things and subjects and Oh I wasted 10 minutes here or all I wish this didn't happen to me and if you find yourself doing that complaining a lot about other people remember it's really not about them it’s about you trying to be very defensive and protective about yourself.
Look at how you can be better look at how you can elevate yourself elevate your game don't wish that things were easier wish that you were better a better person a kind of person just look at things if you were just more knowledgeable and then everything else will start falling into place.
Alright so hopefully you found this video helpful thanks for joining me hope you had a great week trading there's been some great trades out there for us this week you know like Morgan Stanley, Bank of America lot of great trades, shorting Facebook as well right here at the top and Apple of course love that trade because looking at this trade had a lot of great opportunities for the short. You guys know I talked about that one quite a bit because it's an easy stock to get in and out of especially if you're trading larger position.
There’s lot of great benefits and this week and opportunities and especially Wells Fargo's well and then we had Goldman Sachs didn’t trade Goldman Sachs but you had that opportunity as well for the trade. So a lot of the bank's whether you chose any of them could have worked out in your favor very well.
Now they're starting to come into kind of another support level or a potential bounce area so always make sure you're taking profits or getting ready to reduce your risk and then again you can change your direction opinion or trade as things change with the market but nevertheless definitely had great opportunity because I talked about this over the last two weeks, I talked about these banks a building with the last couple of weeks we posted them on uncritical charge so if you just took some action and did something you would have done fairly well and did get some emails about that.
Congratulations to all of those of you that are succeeding alright thanks!
Again remember do what you love, contribute to other people but then go out live your life abundantly there's more to life than money so go out and enjoy it.
Have a great week and I will see you next time.