ALKS -TA tells you everything! How to spot the next breakout
History doesn't repeat itself but it often rhymes. And in the stock market, more specifically with technical analysis, we are able to understand why price moved the way it did in the past and, if it's doing something similar again, what to expect.
So here, we see repeated controlled selling channels (magenta) being used to build liquidity for buyers. We also have stronger selling channel within (teal) that acts as our safeguard from retesting the more tapered magenta selling channel.
When we see price staying within our controlled magenta channel, it typically goes something like this:
1. Price makes a breakout of controlled selling
2. Price hits resistance (usually at the top of a more tapered HTF buying algorithm (green)) and a new magenta channel is created using this point of resistance
2. Teal strong selling algorithm is activated and brings price down to a level of support (usually at the bottom of that same tapered buying channel that caused resistance)
3. Price uses our strong buying continuation algorithm (yellow) to bounce off support, break out of teal (our first indication of a retest of top of magenta as teal is no longer in control) and takes us back to the top of magenta channel (resistance)
This pattern will repeat itself - UNTIL:
4. Having sold off in a controlled manner from top of green tapered buying (resistance), price now reaches the bottom of green tapered buying (support) and uses our yellow strong buying continuation channel to retest the top of magenta
This is where the breakout happens:
5. With increased volume in this most recent yellow buying continuation channel, we retest the top of magenta, and again it acts as resistance - HOWEVER - instead of now going back to retest the bottom of magenta like usual, we instead are picked up by the bottom of our yellow buying channel. This means buyers are not only in control but are prepared to break out of our controlled magenta selling channel.
AND.... Blast off.
This is the theory of almost all of my trading - using ALKS and it's algorithm colors as an example - but if you can understand this and start to see it in your own charts, you are in for a fun (more predictable) ride!
As always please feel free to respond in the comments with any questions or send me a personal message with thoughts, questions, love, etc.
And please like this post (if you liked it) in order for it to reach and help others who could utilize this knowledge to upgrade their trading!
And perhaps most importantly,
Happy Trading :)
So here, we see repeated controlled selling channels (magenta) being used to build liquidity for buyers. We also have stronger selling channel within (teal) that acts as our safeguard from retesting the more tapered magenta selling channel.
When we see price staying within our controlled magenta channel, it typically goes something like this:
1. Price makes a breakout of controlled selling
2. Price hits resistance (usually at the top of a more tapered HTF buying algorithm (green)) and a new magenta channel is created using this point of resistance
2. Teal strong selling algorithm is activated and brings price down to a level of support (usually at the bottom of that same tapered buying channel that caused resistance)
3. Price uses our strong buying continuation algorithm (yellow) to bounce off support, break out of teal (our first indication of a retest of top of magenta as teal is no longer in control) and takes us back to the top of magenta channel (resistance)
This pattern will repeat itself - UNTIL:
4. Having sold off in a controlled manner from top of green tapered buying (resistance), price now reaches the bottom of green tapered buying (support) and uses our yellow strong buying continuation channel to retest the top of magenta
This is where the breakout happens:
5. With increased volume in this most recent yellow buying continuation channel, we retest the top of magenta, and again it acts as resistance - HOWEVER - instead of now going back to retest the bottom of magenta like usual, we instead are picked up by the bottom of our yellow buying channel. This means buyers are not only in control but are prepared to break out of our controlled magenta selling channel.
AND.... Blast off.
This is the theory of almost all of my trading - using ALKS and it's algorithm colors as an example - but if you can understand this and start to see it in your own charts, you are in for a fun (more predictable) ride!
As always please feel free to respond in the comments with any questions or send me a personal message with thoughts, questions, love, etc.
And please like this post (if you liked it) in order for it to reach and help others who could utilize this knowledge to upgrade their trading!
And perhaps most importantly,
Happy Trading :)
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