Reversal Patterns for Swing TradingNASDAQ:ADP has a strong reversal candle pattern indicating underlying strength.
Recently, each time a big long black candle forms, selling halts in a day or two.
A stock to watch for swing trading potential.
Chaikin Oscillator (CHO)
Island Gap Potential, Dark Pool Buy Zone, HFTsThis stock has the potential to form an island gap, which are caused by High Frequency Trading activity that triggers on news. The gap down was too huge, so fundamentals are above the current price. This would be a gap UP potential at this point, to create the island gap.
The lows have been established clearly, so selling short this stock is not wise. But smaller funds and retail may try, as they tend to sell short stocks within a Dark Pool buy zone. Chaikin Osc and Money Flow Index are moving upward but the angle of ascent on price is steeper. The faster price ascent could be rapid accumulation from derivative developers.
UIPath creates software for Robotic Process Automation. It was one of the stocks discussed in the Case Study I did with my students in the summer of 2022 on the disruptive new technologies to watch over the next decade.
Rapid Accumulation Pattern: COHRNYSE:COHR rebounded upward from a strong support level due to Rapid Accumulation by Derivative Developers. The company had a good earnings report on August 15th. This is NOT an all-time high. A shift to a platform or sideways trend would be ideal to reset for the next swing-style run. Chaikin Osc is overextended and floating as oscillators tend to do. Sideways trends pattern that out rather quickly most of the time.
GOOG: Risk for HFT Gap on EarningsThe mighty NASDAQ:GOOG has hit the Market Saturation Phase and its advertising AI is one of the primary problems. Alphabet is losing small business advertisers in droves as prices skyrocket to advertise on Google Ads while results are dismal for the advertisers.
This run down is due to speculation that is not based on financial data. It may find support at this level, but it is vulnerable to an HFT gap down. It is never a good sign to see selling a few days ahead of an earnings report. A gap up would be based on Year over Year, not quarterly improvement.
Buybacks vs. Rotation: JPM and AAPLMany companies are flush with cash right now, so buybacks are going to increase. Buybacks can create plenty of swing trading opportunities.
Buybacks are used by the Board of Directors to drive price upward, or at least maintain price at a certain level. They also remove outstanding shares from public exchanges. The Percentage of Shares Held by Institutions (PSHI) is based on outstanding shares. So with fewer shares outstanding, it can help PSHI hold at a certain level. The Buy Side has been lowering inventory this year. See red arrows on the JPM chart.
In 2018, Buybacks boosted the index components and kept the market from continuing a bear market, which was already underway--a minor bear not a major one. Then in 2019, buybacks surged as the government cut corporate taxes massively. The cash on hand was enormous for most companies so they did mega buybacks, leading the move upward for index components that year. Then, in 2020 the pandemic stock market collapse completed that very odd delayed bear market.
Buyback candles are frequently solid white without wicks or tails. Buybacks often initiate strong swing-style runs, such as they have in $NYSE:JPM. See the blue arrows.
NASDAQ:AAPL also announced a huge buyback program in early May. This gives the Buy Side Institutions the opportunity to lower inventories of AAPL too, without disturbing price much, if at all. AAPL is in a sideways trading range, which is a tough pattern to trade since there is no consensus about what the company is doing to fuel future growth.
MCD: Buy on the dip risk for selling shortThis stock has dipped and slid through its support, which was not a strong support level. There is minimal support nearby. And the support above is now a moderate resistance level.
There was some mild rotation in the Volume Oscillator and Money Flow indicator patterns followed by pro traders selling.
The reversal candlestick pattern failed.
However, the risk for selling short is the retail investors and their investment group gurus advising to buy on the dip.
Today's candle has buy on the dippers in the mix.
MSFT: The risks of selling shortNASDAQ:MSFT ran down yesterday but is reaching the low of the support today.
The next tier of support is outlined also from the Dec-Jan Buy Zone ahead of earnings season.
The risk day traders are taking selling short is if it runs below the low of the support and the Dark Pools surface to buy below its fundamental price level. This is why selling short is risky at this time. Support is around $397.
The big question is where are the lows for fundamental levels for the next quarterly report. MSFT had higher revenues with slightly lower earnings. The CFO did not adjust earnings. It could gap or run down on news, but fundamentals are not way below the current price.
NVDA at the CES Ahead of Earnings Next MonthNASDAQ:NVDA moved up on the excitement around AI at the Consumer Electronics Show. We can see that Professional Traders were anticipating a breakout.
The stock should be able to begin some pre-earnings runs soon, as long as revenues and earnings continue to improve.
Volume Oscillators and Money Flow Indicators have been improving as Derivative Developers continued to increase inventory.
Over-speculated Patterns Heading Into Earnings SeasonNYSE:JPM is the last Bank that has been able to hold onto its Dow 30 component status. It is running up on a combination of buybacks and ETF development for Dow 30 index components.
The stock is over-speculated heading into the earnings season. Volume Oscillators show the extreme pattern clearly. So even minimal weakness in the earnings report could cause an HFT trigger. It might surprise either way.
Some of its growth in 2023 was due to the regional bank debacle when JPM chose certain small banks to target for a silent hostile takeover.
BTCUSDT bearish impulse waveBTCUSDT up-to-date. Price is retracing below USDT41400, which level is a limit for a impulse wave confirmation, from an Elliotician perspective. On this case, if price is rejected from this 78.6% Fibonacci retracement, we'll see a profitable leg downward to accomplish wave -3. Potential USDT40400 target, in demand zone, for this swing trade. Chaikin Money Flow below zero showing selling pressure in confluence with price action.
BTCUSDT IGNITING AN IMPULSE BEARISHAs an update from my first post on this new account, I'm showing u that on this 30m BTCUSDT chart that price is heading in a potential impulse wave (Elliot Wave Count). So, look on Chaikin Money Flow and u'll find a strong bearish divergence printed! Bears on command.
How to See Fundamental Improvement in Technicals, $VRNT ExampleStocks that are forming bottoms right now are completing faster due to the improvement of their fundamentals in the current quarter.
For example, NASDAQ:VRNT is moving out of the extreme dump by HFTs and retail groups. This is a common pattern that indicates shifting sentiment in a bottom formation.
The candlesticks stairstep upward as Pro Traders get in the mix of Dark Pools buying at bargain prices.
The largest Institutional investors who use Dark Pools to accumulate huge positions over time are the first to buy in a long-term uptrend, at bargain prices. It can be a very early signal, but these are the savviest fundamentals-driven investors in the market, so it pays to learn their footprints in stock charts.
MSFT Showing Strength on Retest Ahead of EarningsPercentage of Shares Held by Institutions is a bit low at 69% for NASDAQ:MSFT stock right now. However, the indicators are showing some strength as it retests the lower level of resistance above its current price.
NASDAQ:MSFT reports earnings next week on Tuesday. Microsoft has focused on AI for small businesses, the market niche that helped move it out of its 16-year slump until 2016, and during the pandemic. The pandemic anomalies in revenues should be patterned out this earnings season.
The stock has ample support at the most recent lows. It is a heavily weighted component of all 3 indexes, so an important report for Q3.
BTCUSDT next demand zone aheadThe current price action is aiming the next demand zone as shown on this 30m chart. That impulse bearish movement, as expected, based on Elliot Principle, is about to happen. Bearish divergence on Chaikin Money Flow.
BNBUSDT Price, time & divergences.As a update about my current bear position on CZ coin as you can see by the link below.
The price action is heading one leg downward to complete a wave 5 of a contracting ending diagonal, according to the Wave Principle. That seams a breakdown can be expected to the local demand, as we can see clearly on this chart. After broken, the trendline tends to be retested. All my projections are displayed.
Technicals:
* Chaikin Money + 100EMAx100MA cross;
* ESCGO_LB;
This H4 chart is showing a lot of correlations about price, time and divergences on Chaikin Money Flow in in conjunction of 100EMA & 100MA moving averages crossover plus regular and hidden divergences, which is my system I've used to finding turn-points. If in parallel with RSI, is possible to note a lot of divergences that only Chaikin oscillator can display.
* In addition, an ABCD reciprocal (0.886:1.128) projection as an alternative projection.
BNBUSDT Igniting the most profitable waveBNBUSDT is about to make the most profitable wave for position / swing traders at this actual peak as the price action tends to break-down the ending diagonal, in which the price just complete the final (5th wave) leg. All explained at the chart.
BTCUSDT Complex C - Multi Wave in an Ending DiagonalBTCUSDT made a beautiful corrective C-multi-wave pattern, which surprise terminus finished with an 5th wave leg-up that surpass the trend-line, after an ABCDE triangle. In the Wyckoff Method narrative we can call it an upthrust movement in phase c of a distribution. About the wave count, the entire triangle is an contracting ending diagonal of a corrective wave C, in which we can see a multiple pattern that confused the prediction. After the "thrust" the price action should return to the break point, characterizing a "false break". It's common in C-legs, when the triangle occurs, that it's exceed the break-point. In this case, price reached the weekly supply, interacting with AVWAP from ATH. Now the bears are slowly take control. I'm expecting 18% drawdown of a downtrend till the wave 3 of a potential impulsive downward.
Swing trade about to happen on CZcoin BNBUSDTBNBUSDT is about to finish the 5th wave of a contracting ending diagonal. 12% drawdown can be expected as illustrated on this 1D chart. Price action on intraday below volume POC.
According to my wave count, BNBUSDT is likely to be enter in a 5-wave swing-downward correction to made a lower low amid 160 USDT price @ least extending down 1.618 from the ABCD reciprocal harmonic pattern displayed.
In a Wickoff method perspective, the price tends to enter in a SOW phase, breaking-down this triangle structure, but a rally of relief can be expected as a potential growth of BTCUSDT for the next month open.
Oscillators:
*Fisher Transform;
*ESCGO_LZ (smoothed stochastic);
*Chaikin Money Flow.
This strategy was published for an educational study of the cycles of BNBUSDT market. You can see more of my progression on this short position by my previous posts.
Not interested in buying Cardano coinHighly bearish confluences of strong signals on 1D chart of ADAUSDT. The price action reached supply. Double top formation. Overbought. Heading downward. Potential Head & Shoulders scenario development till the final of April. Grey area is a not-trade-zone.
Technicals:
* ABCD reciprocal .886:1.128;
* Fisher Transform bearish cross / bearish divergence;
* Chaikin Money Flow bearish divergence; 100MA x 100EMA cross;
BTCUSD Daily overview on bearishness signsBTCUSD reached supply as it touched the Anchored VWAP at the 2022 high (@alphatrends insight), rejected the 23,000 price area after rising to 23,062 USD, which could be seen as a bull trap and a false breakout of the mother of all trendlines from ATH. This strong resistance combines the major trendline and the VWAP with a neckline of the 2021 bottom. Price action broke this dynamic trendline on June 13, 22 and tested it on August 15, 22; yesterday tested it and failed to break once again.
From the point of view of chart pattern analysis, we can consider a massive and complex Head and Shoulders formation in the retracement phase up to the neckline, which can be considered as a partial validation signal, which can arouse more interest on the bear side. Key level for new short positions. If we double down on the head range, we might see a confluence with a Fibonacci retracement from the low of Friday-13-Mar'20 for the ATH, which the 88.6% level calls the 11.4k.
Also, from a technical analysis point of view, we have a rare case of bearish divergence on this daily chart, on the RSI (not shown on this chart, but below), OBV, CCI and Chaikin Money Flow and Chaikin Oscillators.
Awesome Oscillator analysis on H4:
Ehlers Smoothed Stochastic
plus Sctochastic Divergence
H1 chart:
Looking closely, if the price loses local support on a pullback in the regression channel, it is possible that we will see a pullback at least to the breakeven level in the 19k-18k range soon, for a correction of the imbalance. Price action may react positively as bulls identify this area as a buy zone. The lower deviation of the Regression Channel calls the 14k sublevel. Therefore, I see a high possibility that the price will hit the demand zone at 16k sub-levels in a corrective wave. On the other hand, if price holds 17k making a higher low, a sharp pullback could send the price action into a large contraction (triangle) formation.
Intraday Triangle:
Looking to the daily chart of TOTAL top 125 crypto-coins market cap we can see that the price pulled back to test the upper trendline of a bearish pennant:
Psychologically, I think long-term buy-and-hold institutions may have an interest in voluntarily distributing this high level to spot traders so they can buy cheaper. Therefore, any pullback in the area of interest will be massively used by moonbois to inject liquidity. We are at a key point where market sentiment could turn from neutral to bearish. And the best choice, IMO, is to get ahead in short positions. But the scenario can only materialize with the definitions from the opening of the US Stock markets and a reversal from DXY. Mainly, I should keep an eye on S&P500 ES futures.
This is merely a technical analysis to improve studies of hypothetical scenarios and not a financial advice.
Best regards,
Thiago Oliveira
@firmestudio
BTCUSDT Bearish scalp below LSMAThe next potential bear trend for a bearish scalping will stay below LSMA. Bearish hidden divergence on Chaikin Oscillator which looks like ready to dive below zero line. Harmonic target area between 14.6% Fibonacci Retracement from peak amid 88.6% of prior upward retrace.
LINKUSDT 2-top, H&S, Butterfly; pullback to necklineLINKUSDT 2-top, H&S, Butterfly; pullback to neckline
After a retrace from the Stocks Market, LINKUSDT presents a perfect price action in bearish confluences after exit of a ascendent broadening bottom. We can see a Head and Shoulders in process now, exactly pull-backing to neckline, in a potential Double Top pattern. The prior swing before this pullback fitted 50% of a potential CD-leg of a Butterfly Harmonic Pattern. We can expect a 2nd downward from the neckline which is the weekly volume point of control (POC), strong resistance. A 1st short-term-target has been applied on an AB=CD projection. The 14.6% Fib level is my key level to put targets. Plus hidden bearish divergences on 1H chart w/ Ehlers Stochastic, Awesome Oscillator and Chaikin Money Flow. Definitely bearish.
$MSFT - potential support in phase 4 $MSFT has been in selloff and it's been frequently discussed these days. If we break current level, there is not much demand down to $220 and $208, which would be about 36-40% down from ATH, respectively.
I can see MSFT getting there if overall market is wacky. Chaikin Oscillator with Bollinger bands also generated sell signal on August 8th and since then it's been in an ugly downtrend. This also looks like a phase 4 - downtrend.
I'll wait patiently and might start adding to my position around 220. Good old MSFT.
