EL looks like it might be breaking outThe 200DMA is 244.57. If EL breaks and holds, could be a promising trade.
1ELX trade ideas
Should I stay or should I go?Three factors for good trade management
Knowing when to make your move is key to being a successful and profitable trader. Here are three things you need to handle to keep on track:
1. Know the probability of the trade
Make sure you know whether your trade is low or high probability and whether it’s against the trend or with it. If a trader goes long in a short market it’s a low-probability trade so more than likely it is going to end up in a losing trade.
If you have a high-probability trade that failed, the market likely wants to change direction. If you have a high-probability trade that you don’t make a lot of points on, it means the market is slowing down or reversing.
Sometimes low-probability trades also bring in points. Lower probability trades are against the prevailing trend, so taking a trade to the opposite side becomes preferable and may end up being a high-probability trade. That is because the trends start to change from the lower time frames to the higher timeframes. But you have to keep an eye on the higher ones especially as it might be a retracement on a higher-level timeframe (typically a 5 or 15 minute timeframe).
2. Know your rules for risk
Be very clear how much money you want to allocate to a trade. Is your rule that you only ever risk half a percent per position or a maximum of 6% of your portfolio on any one trade? Having this clear boundary means that if you lose a few percent it doesn’t make a material difference to your account, your mindset and your wellbeing.
Remember that your risk management will improve over time. Never get put off by the occasional trade that goes against you. If it doesn’t work out, look at your trading plan and see where there is something that could be changed.
3. Practice your strategy and approach
Believe in your system and stick to it and your trading plan strictly, even if it looks like the market is going against you. Of course not all trades will be successful - with any business you have profits and losses. As long as the profits are more than the losses it’s ok.
It’s about practice too, which includes practicing the skill of not doing anything for a few hours until you see a setup that meets your criteria. You never want to be making involuntary or emotional moves.
Ways to improve your chart reading Part 1 – VolumeIt is essential to look at volume when analyzing the charts. Volume equates to activity: it is either the number of contracts placed to the market during the duration of the bar (in the case of exchange volume ) or the number of price changes during the duration of the bar (in the case of tick volume)
It shows when and how the professionals (or as they are called in Wyckoff Volume Spread Analysis, the smart money) are acting. If the volume is relatively big, the smart money is buying or selling. Low volume means they are not interested.
So volume is one of the tools that not only helps us to understand what is happening on the chart, but also helps traders avoid serious mistakes in determining the further direction of the price movement.
Take a look at the Estee Lauder Companies, Inc (NYSE:EL) stock as an example.
This stock was in a down trend since August 2022. On October 20th 2022 we saw the first significant increase in volume on a down bar (the bar with its close price lower than the close price of the previous bar) followed by another price bar with big volume on the 24th of October and then by the huge volume spike on November 2nd. Professionals were active on those bars and they were buying!
The final confirmation that the stock is ready to move higher came on November 9th when after a few bars of sideways movement a down bar appeared on very low volume. This indicates the absence of professional interest in lower prices. Please note that on this day the trend of the instrument did not change to the up side yet and many traders still expected the down trend to restore.
While we are focusing on high-volume bars here, the example above also shows how low volume, when it appears at specific areas of the chart, can provide a lot of useful information too.
To be continued.
$EL with a bullish outlook following its earnings #BeststocksThe PEAD projected a bullish outlook for $EL after a positive under reaction following its earnings release placing the stock in Drift A
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EL daily - rising wedge could be broken downTHE CONSISTENT TRADES analyze EL as a bearish /weak fundamental stock and therefore would be traded only in a short position.
EL is in a rising wedge for some time and did find resistance in this area which was supported in April 2022 and then several times the resistance in the rest of the year. A breakdown from a bearish pattern would trigger a short position.
Volume is increasing on the red day which is bearish.
However, the price is above all major MA which is bullish.
RSI has strong and powerful bearish and negative divergences.
MACD has also negative divergences and doesn't confirm price action.
Overall: EL is hovering at this likely due to the strong and powerful move on SPY and other indices. However, with a possible down leg on SPY EL could get rejected harder from this area of resistance and drop hard. Drop below the red dotted line would trigger a sell signal. However please have in mind report will be at the end of the week therefore do not trade over the report.
EL longThe Estee Lauder Companies Inc. manufactures and markets a wide range of skin care, makeup, fragrance, and hair care products. The Company is the second largest in the sector after L'Oreal and its products are sold in countries and territories around the world.
The Estee Lauder stock is going to buy Tom Ford and IMO its stock can rocket up to $273 and more.
My trade levels
Entry: $233.44
Take profit: $273.79
Stop loss: $213.08
EL daily - likely drop after wedge breakdownEL is weak/bearish fundamental stock therefore would be traded only on the short side.
EL daily - is in rising wedge formation which is one the most bearish pattern. At the moment the price is basing above all major MA which is bullish with decreasing volume. On the other side, the price is at the resistance block which is more bearish than bullish.
RSI is oversold and it is due to cool down what could be bearish for the stock price.
MACD histogram is ticking lower which is more bearish than bullish.
Overall: daily close below the blue dotted line would trigger a short position. Also, a strong move throughout the day with a big volume would trigger a short position too with a stop loss above the last 6 days' high.
EL - Strong Price ActionEL formed a bullish divergence on the monthly chart after capitulating on 3 Nov.
It then began a "recovery" where there were several attempts to break a resistence zone (228 - 231.5), and finally breaking above on 18 Nov. Alas this proved to be a fake break as it went back below the neckline, eventually finding support only at the 61.8% fibonacci retracement of it's recent AB swing.
The last 3 candles then showed a decisively bullish momentum in it's "recovery" : a huge bullish candle (30 Nov) on high volume that propelled it above the neckline again followed by small inside day near the previous candle high, and then another strong candle (last Friday) that did a quick retest and strong rebound from the neckline.
Clearly it's momentum is bullish now although it could hit into short term resistence when reaches the 200 day moving average in the coming days. Trail stops up according to your trading pesonality (20 or 50day MA, last pivot low, fib retracement levels, trendline support etc).
Disclaimer: Just my 2 cents and not a trade advice. Kindly do your own due diligence and trade according to your own risk tolerance and don't forget that money management is important! Take care and Good Luck!
Further drops on Estee Lauder. ELWe are not in the business of getting every prediction right, no one ever does and that is not the aim of the game. The Fibonacci targets are highlighted in purple with invalidation in red. Confirmation level, where relevant, is a pink dotted, finite line. Fibonacci goals, it is prudent to suggest, are nothing more than mere fractally evident and therefore statistically likely levels that the market will go to. Having said that, the market will always do what it wants and always has a mind of its own. Therefore, none of this is financial advice, so do your own research and rely only on your own analysis. Trading is a true one man sport. Good luck out there and stay safe.
EL, ESTEE LAUDER A PERFECT STOCK TO SHORT AT THIS TIMEEstee Lauder missed earnings (or something, outlook, whatever) and today has gapped down bellow significant support level.
Considering all the technicals in the chart and the environment (correction-bear market) we are in, EL looks like a perfect stock to short, specially at this hour when it has retraced back to support.
Stop loss right above $265.
$EL with a Bullish outlook following its earnings #Stocks The PEAD projected a Bullish outlook for $EL after a Negative over reaction following its earnings release placing the stock in drift C with an expected accuracy of 100%.
If you would like to see the Drift for another stock please message us. Also click on the Like Button if this was useful and follow us or join us.
EL looking to break out of YTD consolidationGive or take EL has been consolidating since the beginning of 2021 and is now positioning itself for a nice break out.
Before the official break out I do think it'll revisit the $308 to $310 area.
Currently it's testing resistance and has decent volume as well.
Looking at the weekly or even the monthly chart we can see a clear up trend.
Final Notes:
If you want to get in early, look for buying opportunities in the $308 to $310 range
If you want to be more conservative wait for a break and close above $318.34 with decent volume.
Earnings flag on EL
Flags are areas of tight consolidation in price action showing a counter-trend move that follows directly after a sharp directional movement in price. The pattern typically consists of between five and twenty price bars. Flag patterns can be either upward trending (bullish flag) or downward trending (bearish flag). The bottom of the flag should not exceed the midpoint of the flagpole that preceded it. Flag patterns have five main characteristics:
The preceding trend
The consolidation channel
The volume pattern
A breakout
A confirmation where price moves in the same direction as the breakout
The bull flag is much more predictable when it is created out of good earnings.
Game plan is to buy the break of resistance and follow the trend using the 9SMA as a trailing stop loss.
Source: Investopedia
EL Short William Alligator : the stock is in a bullish position because the candlesticks are above the Teeth, Lips and Jaw. The lines are “eating with an open mouth” and this indicate that the stock is in a strong uptrend.
MACD : the line is above the signal line, this is a bullish confirmation. Moreover, the green vertical bars indicate that the price is increasing.
ADX : the line is at 29.37, so the stock is in a strong uptrend.
Candlestick patterns : there are spinning tops, and this is a bearish confirmation.
Overall : it can be interesting to take a buy position on this stock because all the indicators indicate that the price is increasing and will continue like that. Moreover, the stock is currently in a strong uptrend. Better taking a short-term position because there is a bearish candle. Entry price is higher than the current price for assurance and stop loss is set at -5%.
