Whilst a number of these make it to the Message Board I don’t often put them into blogs but I thought today I would put a couple in and see what sort of interest there is for them – so let me know if you like the US Share Market and I can add more of these setups into the blog in the future:
The first cab off the rank is Anadarko Petroleum. This is one of these charts that is in the early stages of a new trend being formed…possibly.
As you can see here there is a straight edge trendline building up quite nicely. On the more negative side you can see that price is contained within a short-term downward channel. It looks as though the 2 factors are about to meet one another head on.
On the bull camp there is also a bullish divergence visible on the Stochastic Oscillator which suggests that there is more in the way of positive momentum than negative. The 50 period moving average really seems to have formed up as a support level for the price at the moment. I think that ideally traders would look for an entry either close to the trendline or wait for a breakout from the channel – clearly your stop-loss placement will be different depending on which of these you choose. If the 200 period moving average continues to flatline I think you would want to be aware of it as a mean-reversion target and see if there is resistance around that level.
The other one that I thought was worth a chat today is eBay. I posted it yesterday on the Message Board as a potential head and shoulders setup but with the jump in price it has taken on what looks to be a new form:
The price now seems more set in a sideways accumulation pattern so it’s taking on the attributes of a symmetrical triangle. This means that a breakout to both the up or down side will be valid with the height of the pattern then becoming the target for either a long or a short trade. If the price were to break to the downside from here the price target would be the same as had the head and shoulders not been invalidated. That pattern will be voided now though as regardless of what happens a new peak will be formed which would give us 2 shoulders – not what we are after even as a complex head and shoulders so the triangle is the one to concentrate on now. We will have to look at stops when the pattern breaks – worst case scenario you would be looking at the far side of the pattern as the stop but we may be able to find some usable support/resistance before that time comes.