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Accumulation / Distribution Line (ADL)

Breakout Opportunity on USDJPY 240minUSDJPY is up to its same old tricks. The USDJPY like to consolidate tightly for periods of time then explode out of the range. This Breakout/Breakdown opportunity is setting up on the 240min chart. It's just a simple Balance Area. These Balance Area's are where "smart money" is either Accumulating or Distributing positions, we never really know what they are doing until we see the breakout. I'm favoring a downside break BUT I will NOT involve my self until I see a BREAK & CLOSE out of the Balance Area on the 240min Chart. Stops will go 1 ATR above/below Breakout bar. Targets are listed on the Chart. Downside Scenario: IF we break down, THEN we could be setting up a possible Head and Shoulders Pattern. This is shown on the Chart. IF this happens, THEN you will have the option to adding to your position or adjusting Target #2's to account for the Head and Shoulder Trade, just make sure you are following your rules in your Trade Plan. Upside Scenario: IF we break to the upside, THEN Target #1's line up with Structure (Look Left) and Target #2's will require us breaking into new Yearly high's. Breaking new highs is unlikely UNLESS we get a fundamental push like from the FED raising rates next week. I will be holding for Target #2's because that is what my Trade Plan says. TIP: Having a Trading Plan helps to eliminate trading decisions based on "emotions". IF you don't have one yet, THEN I would encourage you to make one before making another trade :)) Best of Luck!
by PateSkpate
4
Breaking down the EURUSD 15minAfter the Major spike in EURUSD last week, it's starting to pullback in a Bull Flag fashion. This usually means a breakout in the direction of current Momentum, in this case Bullish. Price is also working on completing an ABCD Pattern on the 30 min Chart. Zooming in on a Lower Time Frame (LTF) I can see that it's in a small Balance Area. I will look to be trading the Balance Area Breakout in either direction. Entry - Break & Close out of Balance Area Stops - 1 ATR Above/Below the Breakout Bar Target #1 - Measured Move of the Balance Area Target #2 - Either the 38.2% Retracement or the 1.618% Fib Extension, depends which way it goes (Targets are shown on the Chart). Upside Scenario: Given the Bull Flag we are carving out on the Higher Time Frame (HTF), I would have to assume that we will breakout of the Balance to the upside, BUT I have no idea for certain and I will NOT involve myself with this trade until I see the break and close out of the balance area per my rules. You can also adjust Target #2's to the upper side of the Bull Flag Trendline OR you can hold to your 2nd half of your position in anticipation that we Breakout of the HTF Bull Flag. This play would be less of a probability, however, the Reward would be excellent. Trade Target #2's however your rules in your plan tell you to trade so you are not trading off emotion. Downside Scenario: I think the downside Breakdown is less likely to happen given the context of the market and where we are, BUT you never know! If we breakdown, Target #1's line up nicely with an ABCD Pattern on the 30min Chart and also a 1.27 fib ext (not shown on chart, trying to keep the chart clean ;)). Target #2's will be the 1.618 ext which also lines up very nicely with another smaller ABCD Pattern.
by PateSkpate
Breaking Down the NZDUSD 1HRThis is just a Technical Analysis on what COULD happen on the Kiwi. I'm looking at Trading the Balance Area in EITHER direction. These Balance Area are typically areas where Smart Money is either Accumulating or Distributing Orders. I think given the Overall Bearish Trend and the way this Pattern has setup it makes the most sense for a downside Breakdown, HOWEVER, I will only Trade it when I get a Break & Close out of the Balance Area for confirmation per my Trading Rules. Downside Scenario: IF, we break to the downside then we will be forming the Right Shoulder of a Head and Shoulder Pattern, which would make Target #2 a higher probability of getting hit. Also, be prepared for a bounce on at Target #1's because there is structure there looking left.
by PateSkpate
3
KORS- More room to fallThe downward channel broke severely to the downside this week after KORS plummeted an additional 25% post-earnings. I think the multi-year lows of ~35/36 will be tested if not breached. Even if the stock is slightly oversold in the very near term, the trend on the technicals is pretty clear. Fundos- After a dismal earnings release and a 25% drop in the price of shares over the last week, I still think KORS may have more room to tumble. The low price to earnings ratio may lead some investors to believe KORS is a value, but I believe it may be a classic value trap. Overall sales may be increasing but there are major caveats. Margins & comparable same store sales are down. This is a reflection of luxury brand status deterioration. The ubiquity of KORS products is indicative of an over-saturated brand. The products are commonly owned by people in lower economic strata. In my view, this has caused KORS to enter the faux luxury category. To increase incremental sales, KORS has offered deep discounts on their core luxury products (watches & purses). This negatively impacts the bottom line each quarter since margins take a hit. More importantly however, the long term growth prospects will wane if consumers begin to think KORS is no longer 'in', or if they no longer think of it as a luxury brand. Discounting a brand's flagship products is deleterious to the company's image and their long term profitability (see Coach, Abercrombie, countless others)
KShort
by dsorchestra90