Technical Analysis of STOCKS & COMMODITIES
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Article Archive For Ashwani Gujral
DownloadThe Last-Hour Trading Technique
ARTICLE SYNOPSIS ...This trading strategy can be used to enter the market in the last hour of the trading day and exit in the first hour of the next....
Lifeway Foods Bottoms Out (Rounding Bottom)
ARTICLE SYNOPSIS ...After an extended period of falls, Lifeway Foods went into a dull rounding bottoming process. The stock recently exploded on the upside on heavy volume, indicating that strong hands have been accumulating the stock in the past few months....
Is Crude Starting Another Upmove? (Bullish Wedge)
ARTICLE SYNOPSIS ...Crude oil seems to have completed its decline in the last few weeks in the shape of bullish wedge. It seems to have found support at $48. If it sustains the $51 level, it could head to the $61 level....
Infosys Shows Conflicting Head-And-Shoulders Pattern On Daily And Weekly Charts
ARTICLE SYNOPSIS ...Infosys bottomed out on the daily chart, breaking out of a bullish head-and-shoulders pattern. On the weekly chart, it seems to be forming a bearish head and shoulders, unconfirmed as of yet. The weekly chart is defining a $60-80 range for the stock....
Sidebar: Setups by Ashwani Gujral
Aladdin Knowledge Breaks Out
ARTICLE SYNOPSIS ...Aladdin Knowledge Systems Ltd. appears to have completed a long consolidation and now has broken out of a seven-month trendline for another move up....
Adtran Bottoms Out
ARTICLE SYNOPSIS ...Adtran is a stock doing everything right in an uptrend, rising from bullish head and shoulders pattern and being marked by bull flags on the way. The shorter-term moving averages are crossing over the longer-term moving averages from below. These are perfect characteristics of a strong uptrend....
Davita Consolidates, Starts Up
ARTICLE SYNOPSIS ...Davita completes a consolidation, breaks out of 45, and seems to be entering a strong uptrend again as momentum picks up....
Gold Consolidates But Remains In An Uptrend
ARTICLE SYNOPSIS ...Gold moves into a medium-term consolidation but maintains its uptrend. If it can move above 445, it could then move to 496....
Working Money: Combining Candlesticks And Trendlines by Ashwani Gujral
Combining Candlesticks And Trendlines
ARTICLE SYNOPSIS ...Previously, I analyzed trendlines and described some of the more common candlestick reversal patterns. This time, I will show you how to use the two together....
Candlesticks And Trendlines
ARTICLE SYNOPSIS ...You can use them together. Here's how....
British Pound Futures Break Down
ARTICLE SYNOPSIS ...Most currencies are getting weaker as the U.S. dollar strengthens. British Pound futures broke down from a bearish head and shoulders top and the downtrend is likely to gather steam....
Citigroup Breaks Down From A Broadening Top
ARTICLE SYNOPSIS ...Financial stocks are generally the first casualty of rising interest rates. Citigroup's (C) chart has broken down from a broadening top and is likely to see lower levels in the days to come....
India Fund Breaks Down - Is It Because Of Election Results?
ARTICLE SYNOPSIS ...Most people think that the Indian market went through a crash because the government expected to come to power lost their elections, but technical charts show a different picture....
Crude Oil Futures Break Out
ARTICLE SYNOPSIS ...Crude oil has broken out of consolidation patterns both on the weekly and daily charts. Breakouts on two time frames simultaneously lead to powerful moves. One thing is sure: Crude oil has broken out of a strong base for this rally and it is unlikely to enter a downtrend in a hurry....
Canadian Dollar Futures Lead Bearishness In Commodities
ARTICLE SYNOPSIS ...The Canadian dollar had shown bearish patterns long before the commodities started their downtrends. Canadian dollar futures have broken down from a head and shoulders pattern, indicating that commodities might have much more downside to go....
Amgen Breakdown Likely
ARTICLE SYNOPSIS ...Amgen (AMGN) has formed a bearish descending triangle pattern on the weekly chart, very similar to the Nasdaq composite, while the daily chart seems to be consolidating. When two time frames support each other, the signal is confirmed....
Working Money: ADX: An Indicator And Trading System by Ashwani Gujral
The Shark Attack Strategy And Fibonacci Levels
ARTICLE SYNOPSIS ...Discovered long before there were stock markets, the Fibonacci method has proved to be useful for traders....
Cisco Offers A Low Risk Buying Opportunity
ARTICLE SYNOPSIS ...Cisco moved down sharply in the initial part of the recent correction and has been moving sideways since. As the indicators start showing divergence with price, it is likely that the bears are getting exhausted....
Crude Oil Moves Slowly And Surely Upwards
ARTICLE SYNOPSIS ...Looking at their weekly chart, Crude Oil futures are ready to break out of a head and shoulder consolidation pattern. This consolidation occurred over the last four years and now seems headed towards $47....
Are Silver Futures Overheated?
ARTICLE SYNOPSIS ...Silver is part of the precious metals sector currently in a long-term bull market. With all the uncertainity related to the equity markets and the global terror threat, it has had a vertical upmove in the past few days. Vertical upmoves are something experienced traders avoid....
Is Gold Restarting Its Bull Run?
ARTICLE SYNOPSIS ...Flags are often pauses in ongoing trends. They offer a good place for traders to book profits or enter into the trends. Is gold breaking out of one such weekly flag?...
Corn Futures Looking For Another 33% Upside
ARTICLE SYNOPSIS ...Corn futures have formed a rounding bottom over a period of eight years and are now breaking out. A sharp gain of 33% can be expected immediately if futures maintain over 2922....
S&P E-mini Futures Enter A Downtrend
ARTICLE SYNOPSIS ...The S&P e-mini ended its agonizing rally on the daily chart and took the path of least resistance, which was down. This exhaustion pattern is called "Three Little Indians."...
Japanese Yen Futures Ready For More Downside
ARTICLE SYNOPSIS ...The Japanese yen futures are in a deep downtrend. The recent respite appears to be forming a bear flag, the breakdown of which will lead to a level of 8500....
Copper's Relentless Uptrend
ARTICLE SYNOPSIS ...The ADX on the copper chart is at extraordinarily high levels. Profit booking and consolidation should be expected at this point....
Barr Labs Breaks Down From Consolidation Pattern
ARTICLE SYNOPSIS ...Most stocks or commodities cannot maintain a sharp rise or fall for an extended period of time. Sharp moves in any direction are often followed by a consolidation pattern, with an eventual breakout or breakdown in the same direction. The Barr Labs chart is one such example....
Ruby Tuesday Back In A Trend
ARTICLE SYNOPSIS ...Ruby Tuesday had been consolidating for over three months and recently broke to the upside. The ADX has started rising after being below both the +DI and -DI. This indicates that the stock is going to continue its uptrend....
The Canadian Dollar Topping Out
ARTICLE SYNOPSIS ...A head and shoulders pattern is a very powerful accumulation and distribution pattern. The Canadian dollar futures are showing just such a distribution pattern, both on the daily and weekly chart. The following weeks are going to be crucial for the Canadian dollar....
Platinum Futures Break Out Ahead Of The Pack
ARTICLE SYNOPSIS ...Platinum futures have broken out of a consolidation pattern while their more illustrious cousins gold and silver continue to consolidate. Breakouts of stocks and commodities in the same sector should be taken as a hint that similar breakouts will occur in the rest of the sector....
S&P 500 May Be Ending Its Sideways Phase
ARTICLE SYNOPSIS ...Markets often go into sideways trading channels when there are no big triggers to take the market up or down. This seems to have happened with the S&P 500 in the last four months, but it may have finally broken out of the channel....
PetMed Express Inc. Breaks Down
ARTICLE SYNOPSIS ...PetMed Express Inc. (PETS) broke down from a double top, then had a relief rally only to find resistance again near the double top and selling on heavy volume. If you missed the double top breakdown, the relief rally after the breakdown is a good point to sell....
Synaptics Consolidates For The Next Upmove
ARTICLE SYNOPSIS ...Stocks moving in strong uptrends correct sideways when the overall market corrects, and they continue their uptrends once the markets start rallying again. Synaptics (SYNA) has consolidated while the markets corrected and now may be ready to move up....
The Shark Attack Strategy And Fibonacci Levels
Candlestick Filtering
ARTICLE SYNOPSIS ...Getting the best of East and West....
Corning Moves Up Sharply
ARTICLE SYNOPSIS ...Corning has a failed daily head and shoulder pattern, but has a successful bullish flag breakout on the weekly chart. This example underlines the need to examine evidence across time frames and indicators....
When GE Bottoms Out, It Bodes Well For The Market
ARTICLE SYNOPSIS ...GE broke out of weekly head and shoulders pattern and is now heading towards $44. When GE, a heavyweight on market indexes, bottoms out and breaks out into a new 52-week high, the entire market is strengthened....
How The U.S. Dollar Relates To Gold And Crude Oil
ARTICLE SYNOPSIS ...The dollar is going through an upward technical correction while in a downtrend, whereas gold and crude oil are going through a downward correction in an uptrend. Has the downtrend ended for the dollar and the uptrend ended for gold and crude? I don't know. I only know that tops and bottoms are generally not made in a day....
Biotechs Ready To Break Out Of Consolidation
ARTICLE SYNOPSIS ...Biotechs are a key part of the Nasdaq index. The Nasdaq has broken out of its consolidation and its strength will naturally rub off on those constituent sectors that were also consolidating. The biotech index is one such sector and new 52 week highs are imminent....
Entering The S&P 500 On Retracements
ARTICLE SYNOPSIS ...Entering a trend on a retracement is a low risk strategy. But how do you know when a retracement will end? There is no one method that gives the exact answer but a variety of methods give a fair idea of where it could end....
Nokia Gaps Out Of A Basing Formation
ARTICLE SYNOPSIS ...The telecom sector has been moving up recently, thanks to companies like Nokia. Ahead of the pack, Nokia broke out of a 2-year consolidationon on an upward gap. Here's how you can trade that gap....
A Head And Shoulders Consolidation And Reversal
ARTICLE SYNOPSIS ...A head and shoulders pattern can be both of the consolidation and the reversal variety. American Medical Systems Holdings Inc. has one of each in its daily and weekly chart, with both suggesting the same outcome. Volume is a critical factor in determining the power of the breakout/breakdown and the achievement of targets....
Is Oil Headed Back Up?
ARTICLE SYNOPSIS ...Traders should always be wary of trading patterns before they breakout/breakdown because failed patterns can lead to large moves in the opposite direction. In this article, I will demonstrate how a failed head and shoulders in oil may now be leading to a much higher move....
Nasdaq Headed To 2700
ARTICLE SYNOPSIS ...Sideways markets are tedious to trade but finally the Nasdaq has broken out of a sideways market and is heading to 2700....
Telecommunications Starting To Trend?
ARTICLE SYNOPSIS ...Leading sectors from a preceding bull market are often decimated in the subsequent bear market. The telecommunications sector was sent reeling in the technology crash. But they've been making exciting moves recently. Let's see what the possible targets could be....
CompuDyne Corporation Breaks Out Of An Ascending Triangle
ARTICLE SYNOPSIS ...Ascending triangles are different from other triangles. They give an indication of the direction of their breakout before the event. An ascending triangle breakout on heavy volume is a good reason to be long on a stock and CompuDyne Corporation's chart gives you just such a formation....
Is China Unicom Breaking Out?
ARTICLE SYNOPSIS ...Symmetrical triangles are indecisive and difficult patterns to trade. China Unicom seems to have broken out of one, but keep the caveat in mind....
Is It Time To Keep An Eye On The Nikkei?
ARTICLE SYNOPSIS ...The Nikkei seems to have bottomed out for a while; look to enter a breakout for a decent move....
ADRs, ADX and MACD
ARTICLE SYNOPSIS ...Different indicators need to be used in trending and trading markets. Do not use trend following indicators in trading markets, or oscillators in trending markets....
ADX: An Indicator And Trading System
ARTICLE SYNOPSIS ...The average directional movement index can be both. Here's how....
Kellogg Co. Shows A Head And Shoulders Bottom
ARTICLE SYNOPSIS ...The head and shoulders formation is the most intuitive bottoming or topping out pattern. In it, the weaker of the bulls and bears prior to the pattern wins the post-pattern battle. On the strength of this pattern Kellogg Inc. is set to touch $43 in the medium-term....
Nasdaq 100 Moves Into Consolidation
ARTICLE SYNOPSIS ...All rallies need a consolidation phase to build momentum for the next upmove. At least this is my conclusion based on the recent action on the Nasdaq 100. The Nasdaq 100 is likely to trade in a range until it decides on the direction it wants to take....
The CAC Breaks Out Of A Consolidation
ARTICLE SYNOPSIS ...The CAC (French index) broke out of the 3720 level to target the next level of 3840. Most European indexes entered a consolidation before the Dow and are breaking out before the Dow completes its consolidation. Looking for such intermarket relationships can help in analyzing the Dow....
The FTSE Bottoms Out On The Weekly Chart
ARTICLE SYNOPSIS ...The FTSE is consolidating between 4360 and 4520. A breakout above 4520 could lead to 5000 for the FTSE in the medium-term. Indications are this could happen soon....
CNET Breaks Out To New 52-Week Highs
ARTICLE SYNOPSIS ...Stocks breaking out of consolidation or continuation patterns are always the surest trades. In this example, CNET breaks out of a flag pattern on very heavy volume to hit new 52-week highs....
Opportunity In The Networking Sector
ARTICLE SYNOPSIS ...The Networking sector is undergoing a correction after a huge rally to the upside. This correction is happening on a bullish falling wedge pattern....
The Dollar Firms Up And Gold Melts
ARTICLE SYNOPSIS ...The U.S. interest rate scenario has a profound effect on the U.S. dollar as well as gold. As the Fed changed a couple of words in its policy statement, the effect on the charts is clearly visible. While the U.S. dollar has started to firm up, gold has broken down from a daily bearish formation....
Buying Into The Nasdaq On A Dip
ARTICLE SYNOPSIS ...One of the key elements of swing trading and the lowest risk method of trading is buying on a retracement to the main trend. The Nasdaq composite has been correcting for the last few days -- at which levels should you buy back in?...
S&P 500 Correction May Be Ending
ARTICLE SYNOPSIS ...Markets move sideways about 70% of the time. The S&P 500 has been in a 70-point range of a downward sloping channel since April 2004. Is this resilience in the face of an expected oil shock or is this the lull before the storm? Either way, get ready to trade it....
Jupitermedia Corp. Poised For A Reversal
ARTICLE SYNOPSIS ...After an upmove, Jupitermedia Corp. (JUPM) consolidated for three to four months and then broke out for the next upmove. On a weekly basis, the stock is moving up from a 3-year base....
Qualcomm Bullish, Even As Nasdaq Corrects
ARTICLE SYNOPSIS ...Qualcomm has been in a bull market since April 2004. It is outperforming the Nasdaq, even as the Nasdaq has corrected, thus proving the old Wall Street adage: there is always a bull market somewhere....
Gold Likely To Remain Sideways
ARTICLE SYNOPSIS ...Gold seems to be in a $60 range for the foreseeable future, with both the daily and weekly charts showing weak trends. As long as there are the opposite pulls and pushes from interest rate hikes and global terror, gold is likely to remain sideways....
Silver Futures Bottom Out After A Massive Fall
ARTICLE SYNOPSIS ...Silver fell by 40% in April 2004, and then formed an accumulation pattern. If it breaks out above 6770, it should see a target of 7470. With the uncertainity in global markets and the terror alerts, silver prices will stay firm....
Nasdaq Composite Breaks Down From A Bearish Pattern
ARTICLE SYNOPSIS ...The Nasdaq composite broke down from a bearish head and shoulders pattern on both the daily and weekly pattern. It has returned from the upper end of its weekly range to continue trading in a consolidation range....
Working Money: Candlesticks And Trendlines by Ashwani Gujral
A Triangle On The U.S. Dollar Index Futures: Will It Flatter Or Deceive?
ARTICLE SYNOPSIS ...The U.S. Dollar is perhaps the instrument most directly affecteted by an actual hike or indications of a hike in U.S. interest rates. The U.S. Dollar Index Futures chart is showing that traders expect a hike in interest rates soon....
Silver Breaks Down After A Vertical Rally
ARTICLE SYNOPSIS ...Words from Alan Greenspan can often make or break a market. Silver has again proven this to be the case. Silver leads the commodity tailspin. But were there warnings of this crash?...
Gold Moves Sideways, May Be Distributing
ARTICLE SYNOPSIS ...Except in extraordinary cases, tops and bottoms take time to form. This is because large traders and investors tend to distribute their holdings to retail traders just when these retail traders expect prices to hit new highs again....
Stryker Corp. Shows Long-Term Uptrend
ARTICLE SYNOPSIS ...In a sideways market scenario, there are always stock-specific stories that emerge showing strong uptrends. They offer the lowest risk buying opportunities when the market has no underlying trend....
W.W. Grainger Inc. Breaks Out
ARTICLE SYNOPSIS ...Symmetrical triangles are difficult to trade because they do not give any directional information about their breakouts. But they occur far too frequently for traders to ignore them. In this article, I look at W.W. Grainger's (GWW) symmetrical triangle consolidation pattern that has been forming over the last two years....
Failure Of A Bottoming Out Pattern In Peoplesoft Inc.
ARTICLE SYNOPSIS ...Peoplesoft Inc. was forming a head and shoulders pattern on the weekly chart, indicating a bottom formation. But the pattern seems to be failing as prices refuse to cross the neckline....
Infospace Gains Momentum
ARTICLE SYNOPSIS ...Infospace has completed a head and shoulder bottom formed over the last two years and broken out to the upside. The target could be $50, with further upside possible....
Yahoo! Maintains Uptrend On Their Weekly Chart
ARTICLE SYNOPSIS ...Even in choppy markets certain stocks show strong uptrends. These are the stocks that create wealth for investors and traders. But care should be taken to buy them on declines....
Soybean Futures Ready For Long Consolidation?
ARTICLE SYNOPSIS ...In bull runs traders and investors often forget about corrections and consolidations. A high ADX should caution traders not to buy at higher levels as a consolidation can happen at any time. Soybean futures seems to be heading into one such consolidation....
Qualcomm Shows Strength While The Other Techs Stumble
ARTICLE SYNOPSIS ...Qualcomm has formed a rounding bottom on a weekly basis and is making multi-year highs. It can be expected to head to the $88 level once $70 is taken out....
Swiss Franc Futures Give Contrary Daily And Weekly Signals
ARTICLE SYNOPSIS ...When the weekly and daily charts show contradictory signals, weekly patterns generally prevail. The Swiss Franc futures shows a bearish daily chart and an upward channel on the weekly chart. The first step to trading such patterns is to reduce your trading volumes....
Citigroup Maintains Uptrend, Breaks Out Of Consolidation
ARTICLE SYNOPSIS ...Markets are actually in sharp up or downtrends only 30% of the time. Seventy percent of the time, they are either in weak trends or "choppy," moving in a sideways consolidation. The US market seems to be going through a weak trending phase and traders need to be very cautious when entering, as stocks tend to move in large swings in either direction....
Ready To Rally? Ford Forms A Bullish Wedge
ARTICLE SYNOPSIS ...Bullish wedges are corrections in an upmove. Often the price of a stock in such a correction will retrace to a major support level. From there a resumption of the uptrend may be expected. Ford has made one such bullish wedge, correcting to major support at $12. This, along with divergences in the indicators, means Ford may be setting up to be a good medium-term buy....
Dell Corrects In A Downward Channel
ARTICLE SYNOPSIS ...Strong stocks tend to correct in sideways channels. Divergence in the MACD histogram and the stock price are a signal that the consolidation may be ending and the next move is likely to be a continuation move....
The Nikkei Outperforms World Markets
ARTICLE SYNOPSIS ...The Nikkei broke out of the 11,000 level the last week of February 2004 and held that level, moving sideways throughout the correction in the global markets. It is now breaking out from a consolidation at the 11,600 level, ahead of all other markets....
Working Money: Candlestick Filtering by Ashwani Gujral
UPS and the ADX
ARTICLE SYNOPSIS ...ADX is one of the indicators used to determine whether a stock is in a trend or not. This UPS example shows how to use the ADX along with chart patterns to enter high probability trades....
Yahoo Consolidates Before Moving On
ARTICLE SYNOPSIS ...If people thought the Internet stocks were dead and buried long ago, think again. Yahoo and Amazon are two stars rising from the rubble....
Janus Breaks Out Of Short-Term Reversal Pattern
ARTICLE SYNOPSIS ...Here is a good example of an inverse head & shoulders formation on the chart for Janus Capital Group (JNS)....
Cisco Systems Bottoms Out Into A Basing Pattern
ARTICLE SYNOPSIS ...Leaders of a previous bull market often get slaughtered in the subsequent bear market, and that is exactly what happened to technology stocks and to Cisco Systems....
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