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Swing Trading GCI week_11

This is video 10 week 11 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.

Special offer: "Capturing Profit with technical Analysis"

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This is a video 10 with week 11 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”, a complete technical analysis reference inclusive a trading method called LOCKIT.

First we have a look at our short position based on the daily chart. My opinion we have not yet reached the next target between $13.5 and $13. I expect support around that level from the 200 days moving average. For now the position is still open with a good profit.

The daily indicators all have room for a further move down with increasing volume during the down move. This confirms that we most probably have not yet reached our first target down.

On the weekly chart price is falling definitely below the median Bollinger band line, moving towards the 50 and 100 weeks average and the 61.8% Fibonacci retracement.

All indicators on the weekly chart have room for a further move down. Since the fast RSI swing indicator is already bottoming, there may be some up reaction before reaching the price target.

 

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We had an open position on the hourly chart, started may 13 at $16.8. Price made an up reaction touching the 100 hours average, then turning down again. A Fibonacci projection that moment in time, from the top and the end of correction wave (A) gave a price target at $14.4. And if the expected wave (C) is in the same order of amplitude as wave (A), we can also expect this kind of target price. We therefore entered a target closing price of $14.5. This price was reached the last trading hours on Friday. The position was closed at $14.5 a profit of 13.7% in about 7 days.

In the hourly indicators, we note room for a further move down. But I prefer taking this nice profit before the weekend.

Looking at the 5 minute chart there was a shorting possibility Monday May 17 10:45 ET. Considering the market down trend we prefer trading on the short side and we opened a short position at $16.26. Price moved up to the 200 periods average, but finds too much resistance and turns now back below this average. The uptrend line is also broken. In the following chart you can see indicators turning down after topping and diverging. A stop at the last top gives a good risk-to-reward ratio. Good reasons to open this short position now.

Here you can see the indicators turning down after topping and most of them diverging, supporting our decision to go short now.

About 25 minutes later, price makes a new low. A short term Fibonacci projection gives us a price target at $15.65 around a previous support level. We set our price target at $15.7.

Our price target is reached 12:05 ET. The position is closed with a profit of $0.56 or 3.4%.

After some horizontal move, price moves up the rest of the day. The opening next day is up with a gap, reaching a 423.6% Fibonacci target. At this level we now get a bearish engulfing candle pattern, confirmed with another black candle with a lower low and lower closing. As you will see in the next chart, all indicators are topping and turning down. It looks like a good time to open another short trade. The position is opened May 18 09:55 ET at $16.43.

The indicators are topping and turning down supporting our decision to go short again.

Price moves down, falls through the 50 and 100 average, finding support at the 200 period's average. Here we have an up reaction that is stopped at the 50 period's average forcing price once more down. Drawing a Fibonacci projection from the top and the lowest low for now, we get a first target at 161.8% or $15.5.

Let's have a look over a longer period for a better estimate as to where this down move can go. Best guess is that we are making a correction wave down and that we started completing the wave C down. If correct, this should be below the end of wave A or lower than $15.5. Our second Fibonacci target is around $14.8. Also if we take the height of the A wave and project this measurement down from the end of the B wave, we expect a move down to about $15. So, we keep these targets in mind for action if price starts turning up around this level.

After definitely falling through the 200 average, price moved down to the first Fibonacci target, making a very small up correction, before continuing the downtrend the next day. Price now reached the second Fibonacci target and breaks the last downtrend line with as you will see in the next chart, indicators turning up from below with a positive divergence. Time to take profit. The position is closed at $14.95 or a profit of $1.48 or 9%.

Indicators showing positive divergence supporting our decision to close our short trade. There was another small profitable short trade on Friday, but I will leave it out here. The results of this trading week are added in the next results table.

The hourly and the 5 minute trading results of this trading week are added in the table. There is now a total profit for all trades of 112%, exclusive the open position based on the daily chart with another 20% profit. Not bad in less than 3 months' time. I have tried to show you for some weeks now how you can trade profitable using technical analysis, trading a stock in different time frames. I will stop this experiment now.

This is the end of the last update trading the stock GCI. I hope you have learned a lot from it. I will continue as much as possible to show you more technical analysis techniques in future videos. Tell your friends about these videos and while visiting my website order my book “Capturing Profit with Technical Analysis”. A complete technical analysis reference and a trading system called LOCKIT. Follow my weekly updates at my website stocta.org about the S&P500 index and the EUR/USD Forex pair. See you soon in the next video.

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