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Swing Trading GCI week_03

This is the third video of the life swing trading example using the stock GCI. Idea is that you follow the trade evolution systematically learning to apply technical analysis techniques.

For trading GCI, we are using a chart template of which the last version is presented HERE. It is possible to be informed immediately when a trade is opened or closed. Click the RSS feed button at the top right of this page and follow the instructions. Otherwise you can also look at this page to find out about the latest actions. Every weekend, there will be a video update like this one commenting the past week using a simulated account and some preview.

We will use a daily, weekly and eventually an hourly chart. On these charts we will use a number of indications as shown in the template and as explained in training video 034.

This is not an invitation to trade this stock, information given is to be used for training purposes only. Stocata.org will not accept liability for any loss or damage which may arise directly or indirectly from use of or reliance on this information.

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This is the third video of the life swing trading example using the stock GCI. Idea is that you follow the trade evolution systematically learning to apply technical analysis techniques. Receiving live trade signals is possible from an RSS link at stocata.org. Please note, this is not an invitation to trade this stock, information given is to be used for training purposes only. Stocata.org will not accept liability for any loss or damage which may arise directly or indirectly from use of or reliance on this information. Pay a visit to my website at stocata dot org and buy my book “Capturing Profit with Technical Analysis”.

Not much change on the daily chart as we will see later on. However there were a couple of opportunities on the hourly chart. March 22 at 12:30 EST, price moves above the last red downtrend line, moving above the 50 and 100 hours simple average after a bigger positive turn from a low point. At the same time almost all indicators are making a positive divergence as you will see in the following chart. This looked a nice opportunity to buy GCI for a move up to the resistance of the previous top. So, buying here at $16.25 and setting a selling order at $16.75, I was going for a profit of $0.5. Notice that I keep the selling order a bit below the previous top. Using a stop at the previous low point gives a bad risk-to-reward ratio, so I keep a closing price stop at $16, the opening price at the low point, and the level of the lower Bollinger band that moment in time. Drawing the last possible brown pitchfork, I got an idea when the target selling price could be reached. I also expect the inclination of the up move to be in line with the previous up move, as indicated by the blue arrow lines.

As mentioned in the previous chart, here you can see SVAPO in the third window and the RSI-Swing indicator in the second window making a positive divergence and the BB%b indicator in the last window, making equal lows. Only the blue ARSI and the red Stochastic indicators in the first window are moving convergent with price, with ARSI also moving up from the bottom. It looks like we can expect an up move.   

March 23 at 14:30 EST, price hits our selling target, just below the median line of the pitchfork. The trade is closed at $16.75 with a gain of $0.5 or a 3% profit. Keeping in mind that we are still in an up move, I will basically not go for a short trade in the following hours. The possible profit looks too small with lots of support nearby.

In the indicators chart, all indicators are still moving up, it would also be too early to look for a short trade already.

The down move seems to be limited, finding support on the 20, 50 and 100 hours averages. March 24 at 14:30 EST, price brakes through the last downtrend line. Should we take a long trade here? Resistance from the last two tops is very close. Additionally we know from the daily chart that the last longer term top is also close at $17.33 and one of the possible Elliott counts is that we are making a B-correction wave up, which should stay below this previous top at $17.33. Reason why I prefered not to take a long trade here.

 

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March 25 at 12:30 EST, after a small up move, price seems to be turning down again. Taking a short position here at $16.83 allows a close initial closing price stop setting at $17, the previous top. If we go for a profit target a bit above the previous low at $16.35, we have a very good risk-to-reward ratio. The last brown downward pitchfork shows when we can expect to reach that profit target. Let see if there are also signals in the indicators' chart confirming a turning point down.

This seems to be the case. The blue ARSI and RSI-swing in the first and second window are showing negative divergences with price. Also SVAPO in the third window will make a divergence when price keeps moving down now. The red slow stochastic in the first window is overbought and making a double top. We open a short position at $16.83.

We are lucky, March 26 at 12:30 EST price hits a low of $16.33 exactly at the pitchfork median line crossing the price target. The position is closed at $16.35, a profit of $0.48 or 2.8%.

On the weekly chart price continues moving up and a new higher high for an alternate Elliott count is still possible. There are no signs of a reversal yet.

All weekly indicators seem to be for now in agreement with a further up move scenario.

In the daily chart we are still above the medium term uptrend line, but still below the previous top. If price turns down here we have finished a correction wave B up and are going next for a wave C down below $13. It looks like next week will confirm most probably one or the other scenario.

In the daily indicators chart, there is a negative divergence in the first and second window with the blue ARSI and RSI-Swing indicator and the slow red stochastic is topping. This would point in the direction of a correction down. However this is not the case for SVAPO and the BB%b indicators in the last two windows. Furthermore there is also a hidden divergence between price and the ARSI and RSI-swing indicators, which points in the direction of a continuation of the up move. Clearly we want to wait for any action on the daily chart!

With the update on March 23, we closed the previous short trade started March 22. I added also the two winning trades of this week. A total profit of almost 8% for now.

This is the end of last week's overview swing trading the stock GCI. Idea is that you follow the trade evolution and that you systematically learn applying all technical analysis techniques. You can receive trade signals during the week via an RSS link at stocata.org. Tell your friends about these videos and while visiting my website order my book “Capturing Profit with Technical Analysis”. See you in the next video for more swing trading GCI.

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