Friday, June 8, 2018
Happy Friday Traders!
Over the last few days I have been looking deeper into our Chart Pattern Recognition Module (CPRM) and the fantastic tools available. Much like you all, I sometimes forget how powerful some of our tools are and need to go back for a refresher.
Today’s signal is the result of this…
Before we get started if you are not familiar with the CPRM feel free to take a look. I have linked the PDF below. I am also working on a new informational page to give you more insight into the power of this wonderful tool.
https://www.omnitrader.com/pdfs/CPRM6.pdf
I have configured the CPRM to find both Support and Resistance and Trendline Breaks. I want to keep the signal generation simple with good fundamentals. Although CPRM can find over 200 different types of patterns, I will be using patterns that most traders are already familiar with.
Below we have a chart on Allergain Inc. (AGN). Although, CPRM generated about 10 great opportunies today I chose AGN because of the additional confirmation leading into this trade. I will break down a few ideas and concepts that go along with patterns in general.
OK, So the signal generated on AGN was by the CPS_TrendlineBreak strategy included in CPRM6. This strategy looks to identify points on the chart where Trendlines have been established and prices have broken through the defined level. You can see that from March to May we have a short term Trendline established off the top of a nice consolidation.
GAP
Gaps indicate that a new trend is starting, accelerating, or is near its end. In this case we are just now beginning to gain momentum coming off support and energy is beginning to build. This tends to indicator we are going to be continuing to move in the direction of the gap.
Resistance - Consolidation
The GAP is testing the upper boundaries of the next confirmation we see, a consolidation. This consolidation is a point in the chart where the market sees quite a bit of in decision and a battle between the bulls and bears is ensuing.
Double Bottom
The most powerful confirmation we see for this signal is the very elusive double bottom. This pattern is a tell-tell sign that there is an upcoming shift or a move has come to an end. This is one of my favorite patterns as profits tend to be very high when you see this type of pattern.
Conclusion: The signal generated was very strong on its own accord but with all of the additional confirmation leading into this trade is why I have chosen this for the daily signal. This trade has both short term and long term implications.
Short term profits will sit near the $190 Range. This is a very good target, however, if you are looking for long term gains and don’t mind holding on for a bit you are looking over $250 which was long term resistance.
Well that’s it until Monday.
Like this trade? Hate this trade? Let me know your thoughts. rolson@nirvsys.com
The products and demonstrations listed on this blog are not recommendations to buy or sell, but rather guidelines to interpreting their respective analysis methods. This information should only be used by investors who are aware of the risks inherent in trading. Nirvana Systems shall have no liability for any investment decisions based on the use of their software, any trading strategies or any information provided through other services such as seminars, webinars, or content.