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Swing Trading GCI week_09

This is the eight 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. You can 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 weekly, daily, hourly and 5 minute 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 eight video or week 9 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. 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”.

As promised in the video of week 8, we start this week with the trade based on the daily chart we could not publish yet. On April 27 price fell through the uptrend line after making a high that is according to our count the top of intermediate wave 5 and medium term (5). We now expect an ABC correction down, with possibly an impulse wave for the correction waves A and C. Price is now also breaking the median average line of the Bollinger bands. In the next chart we will see if our indicators support this decision. For now we open a short trade April 27 at $17.6. Using a Fibonacci projection we set our first profit target at $13.5, we will follow up and eventually adapt this target. We keep a stop loss level at $19.7. We also draw a pitchfork. We do not use the high value of the top candle here, because it will make the downtrend channel too sharp. Using the opening price creates a pitchfork in line with the highs of the last 2 candles.

In the indicators chart we see higher prices diverging with lower values in the indicators. This is a negative divergence basically leading to a price reversal. It looks like opening a short position is the right thing to do.

And this was the situation at the end of that week. Price started moving down.

And this is the daily chart now. Our short position on the daily chart is still open.

 

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And these are the indicators now.

There were 3 good opportunities to trade on the 5 minute chart. Monday May 3 at 10:40 ET we opened a short trade at $17.28. It looks like price has completed a B correction wave, breaking the uptrend line and breaking a support line. We get a good risk-to-reward ratio with a stop near the last top.

The indicators made tops and are moving downwards. So, there is room for a further move down. Since this is a B correction wave there are mostly no negative divergences except here in the SVAPO indicator.

We can make a price target projection with a pitchfork channel and a historical Fibonacci projection. We use the top side support of the big gap to make this projection. This gives targets at $16.95, close to a previous support level and next at $16.65. An action-reaction line with the uptrend line as a center line, gives a time projection. This is also the case with a downtrend line. All these lines point to the beginning of the next day for the target to be reached. We set the target at $16.7.

The price target was reached within 5 minutes after the opening May 4 and the position was closed at $16.7.

Price started moving flat for a while and now breaks an uptrend line and the 50 bars moving average. We expect a wave 5 down below the wave 3. We will have a look in the following charts how we arrive to this count. We open a new short position may 4 at 14:40 ET at $16.62.

The indicators agree and show some divergences.

Using hourly bars we can see from the last top the start of a down move. We assume the first A correction wave will be made with an impulse wave down. We now seem to be in the making of a wave (3) down.

Taking the part of the wave 3 up to now in the 5 minute chart, we have an intermediate wave 3, now making correction wave 4 and next expected is wave 5 down.

So, this is the starting point for the new short position. Making a historical Fibonacci projection and a downward pitchfork, we get a price target around $16.02. So, we set a closing order at $16.05 and a stop above the last top.

Within 10 minutes after the opening on May 5 our target was reached and our position closed at $16.05.

We do not want to trade from the long side for now. So, we are waiting for the next opportunity for a short trade. Now it looks like correction wave 4 is completed. Price breaks the uptrend line, turns against resistance and as you will see in the following chart, all indicators have already turned down. We open a short trade may 5, 12:30 ET at $16.56.

The indicators confirm a down move.

Let's make a price target projection. A downward pitchfork and a historical Fibonacci projection at 261.8% give a price target around $14.65 for May 6. We keep a stop loss at the last top and open the trade now.

The profit target is reached May 6 around 14:45. Price moved down along the upper side of the pitchfork and reacted a couple of times against the 50 bars average. The more recent red dashed pitchfork confirmed the latest price trend. The position was closed at $14.70.

Based on the hourly chart we had an open short position started April 27 at $18.3. May 6 you can see price falling through the first Fibonacci target. We are making an Elliott wave 3 down. We are setting a target closing order here at a level above the next Fibonacci target at $14.50.

This target was reached the same day and the position was closed at $14.50.

All the results of this trading week are added in the table. There is now a total profit for all trades of 78.4%, exclusive the paper profit on the open position based on the daily chart.

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. Tell your friends about these videos and while visiting my website at stocata dot org, order my book “Capturing Profit with Technical Analysis”. See you in the next video.

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