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Article Archive For Stella Osoba, CMT

  • Where Next for the Dow?

    ARTICLE SYNOPSIS ...The last few months have seen increased volatility in the stock market. When caught up in the stress that several hundred points in daily swings can bring, it is tempting to wade deeper into the tall grass amid all the uncertainty and lose sight of the forest for the trees. So let's take a step back and attempt to answer the question which is the title of the piece. Where next for the Dow Jones Industrial Average?...

  • It's Over When It's Over

    ARTICLE SYNOPSIS ...One of the ways we give back all our gains is by not recognizing when a successful trade is over. Learning to step back and do nothing after exiting a successful trade can be hard, but is an essential step to achieving trading mastery....

  • Home Depot

    ARTICLE SYNOPSIS ...Since its close at 206.05 on January 26, 2018, Home Depot (HD) has been in a rout. What do the technicals say about this Dow darling?...

  • How Much is a Star Performer Worth?

    ARTICLE SYNOPSIS ...With Tesla (TSLA) in the news because its shareholders are set to vote on a massive $2.6 billion compensation package to be paid to the company's part time Chief Executive Officer, Elon Musk, over the next decade, now seems like an opportune time to study the chart of this volatile stock....

  • Staying Mindful

    ARTICLE SYNOPSIS ...Regeneron Pharmaceuticals, Inc. (REGN) has been trading below its 50-day moving average since August 2017. Its stock, which once touched highs of 605, is now trading at 293. So what's in store for this stock? Is it wise to wait for an opportunity to short the stock, or is the worst behind it and should we look for a rebound?...

  • Momentum and Simple Moving Averages

    ARTICLE SYNOPSIS ...Sometimes a stock's price will move so far away from its simple moving average (SMA) that the temptation is to trade in the opposite direction. The idea underlying these trades is that stock prices will always revert to their mean. Right? Maybe....

  • Pulling The Trigger Can Be Difficult

    ARTICLE SYNOPSIS ...We all know markets are fluid. They are constantly moving and we can never be sure what they will do next, so it is tempting for us to constantly change our minds as well, effectively moving the goal post further and further away....

  • When A Step Back Is Revealing

    ARTICLE SYNOPSIS ...For many intermediate-term traders, the daily charts often provide sufficient information for trades. But there are times when the additional information provided by weekly charts can be invaluable....

  • Manias And The Madness Of Crowds

    ARTICLE SYNOPSIS ...I usually will not write about IPO's because there is simply not enough technical information available to do a halfway decent analysis. So why am I writing about LongFin Corp. (LFIN)? Because sometimes a stock acts so spectacularly that a special mention is warranted....

  • Grand Theft Auto's Parent

    ARTICLE SYNOPSIS ...Grand Theft Auto is arguably the most successful video game franchise in history. But its parent Take Two Interactive Software, Inc., recently completed a head and shoulders topping pattern. What's next for this stock?...

  • What A Breakout Looks Like?

    ARTICLE SYNOPSIS ...Deciding when to enter a position for a long trade can be confusing. Knowing what to look for in a healthy breakout can help....

  • ABBV'S Band of Resistance

    ARTICLE SYNOPSIS ...AbbVie's (ABBV) stock got slammed after disappointing results on small cell lung cancer drug, Rova-T, test results. The drug was the lead product of Stemcentrix, the biotech company ABBV acquired back in 2016 for $5.8 billion. On Thursday, March 22, 2018, ABBV'S stock gapped down and lost 12.8% of its value in heavy trading. The gap down resulted in a band of resistance which is the subject of this article....

  • Weaponizing Facebook

    ARTICLE SYNOPSIS ...Facebook is in the news because of Cambridge Analytica, the privately held data company which harvested data from millions of Facebook users to develop psychographic tools. These tools were then used by the company to target individual voters with stories that would appeal to their emotional biases. By influencing their decision making processes, or as Christopher Wylie the whistleblower and former research director said, their 'inner demons', the firm was able to sway, unknown to the individuals concerned, the way they would eventually vote. Cambridge Analytica effectively weaponize...

  • What Next for The Juggernaut That is Amazon?

    ARTICLE SYNOPSIS ...With Amazon's (AMZN) recent purchase of Wholefoods Market, it looks like there is no stopping this juggernaut of a stock. But what does a study of the price chart reveal about the performance of this stock?...

  • How Low is Too Low?

    ARTICLE SYNOPSIS ...Sometimes we look at a chart that is in a strong downtrend and are tempted to jump to the conclusion that the stock has fallen too far down and therefore act in anticipation of a rise....

  • What Next for Brinker?

    ARTICLE SYNOPSIS ...After a painful decline lasting all of the past year, has Brinker Intl, Inc. (EAT) finally found support at the low of $29.50 reached on September 7, 2017?...

  • Playing the Waiting Game

    ARTICLE SYNOPSIS ...Nowhere is it more important to cultivate patience and discipline than in trading. Entering a trade too early will often result in a stagnant trade and/or dispiriting losses which will often cause the trader to exit the trade early and miss the big break out when it eventually comes....

  • Reading RSI Overbought/Oversold Signals

    ARTICLE SYNOPSIS ...Traders often use overbought/oversold signals generated by an indicator like the Relative Strength Indicator (RSI) to place contrarian bets. But sometimes sticking with the trend is far more profitable....

  • A Warning About Divergencies

    ARTICLE SYNOPSIS ...Traders often use momentum indicators like the Moving Average Convergence Divergence (MACD) to spot negative and positive divergences with price. This article will discuss why divergences do not always work....

  • This Is What Makes Hindsight 20/20?

    ARTICLE SYNOPSIS ...Sometimes we look at a chart and clearly see the trend. We wish we had only seen it earlier, when it had broken out from its basing pattern and begun its up/down trend. If only, we think, if only we had seen it when it was breaking out, we could have stayed with the trade as it rose effortlessly upwards. But is this actually the case? Even if we had been lucky and astute enough to spot the stock as it was breaking out of its basing pattern, would we have held onto the trade as it rose higher? Often not. We will explore some reasons why below....

  • A Quick Read of Fabrinet

    ARTICLE SYNOPSIS ...The chart of Fabrinet (FN) has not been an easy read. After reaching a high of 46.50 on October 5, 2016, it began to move lower, making a series of lower highs and lower lows, but a breakout to a new high of 47.50 on February 13, 2017, causes us to reconsider this chart and ask, is now a good time to be long FN?...

  • Gail Dudack: The Technician's Technician

    ARTICLE SYNOPSIS ...She started out on Wall Street in the days of the ticker tape and over the years became a go-to market authority and a respected technical analyst. Here, she shares her views on her career as a technician and strategist, the historical developments she's witnessed that changed the course of Wall Street, and her opinions on the changing global financial landscape...

  • Trading Signals and the Commodity Channel Index

    ARTICLE SYNOPSIS ...Donald Lambert developed the Commodities Channel Index, which as the name implies was originally intended to be used with commodities trading. However, this indicator has been successfully applied to other markets, including stocks....

  • Using Dawn's Early Light To Spot Early Trend Reversals

    ARTICLE SYNOPSIS ...Dawn's early light is the Sanskrit name that Tuschar Chande gave to an indicator he developed in 1995. The Aroon indicator consists of two separate lines; the Aroon-Up and the Aroon-Down. We will use the chart of Intuit, Inc. (INTU) to study how this useful indicator can help us spot trend reversals as they are beginning....

  • Bottom Fishing

    ARTICLE SYNOPSIS ...It is tempting to look at the price of a stock and think that if it is cheap, then it is a bargain. This is a trap novice investors often fall into because it is easy to confuse price with value....

  • Working with the Coppock Curve

    ARTICLE SYNOPSIS ...As traders, we want to find signals for fast, profitable entries and exits, but sometimes it pays to take your time to enter a trade correctly, even when doing so means being subjected to a series of whiplash trades. The eventual pay off might make it worth the pain....

  • Gilead Sciences and the Ulcer Index

    ARTICLE SYNOPSIS ...One of the worst performing sectors this past year has been the Health Care sector, and of its sub-sectors, Biotechnology was one of the poorest performers. Gilead Sciences (GILD), a component of that sub-sector lost about 21% over the past year, making it one of the weakest performers year-to-date in its group. A quick glance at its chart shows it still in a steady down trend. But we all know that nothing lasts forever and S&P 500 companies likely will not fall to zero. So, are there any early shoots of positivity which suggest we might be wise to start giving GILD a closer look for a lon...

  • Will AbbVie Break to the Downside?

    ARTICLE SYNOPSIS ...AbbVie, Inc. (ABBV) is a large cap growth stock in the health care sector which has been on a tear for the bulk of 2017. It recently tested and retreated from its prior high. The question now is, what does this bode for the stock?...

  • Be Very Afraid

    ARTICLE SYNOPSIS ...Sometimes the best time to enter a long position is when others are afraid. Because we are all mostly wired alike, being very afraid might not be a bad gauge to add to your tools to help you determine when a long trade might be at its most attractive....

  • Beware The Hanging Man

    ARTICLE SYNOPSIS ...Deere & Co (DE) had been in an uptrend for much of the past year like many other industrials. But with the recent hangman candlestick pattern formation, it is time to reassess DE's bull trend....

  • Watch Your Tails

    ARTICLE SYNOPSIS ...Long upper candlestick tails and long lower candlestick tails should never be ignored because they are often telling you something about the likely future price behavior. Too often we look at a chart just to see if price is going up or down, but successful chart reading is about much more than that. It is about cultivating the ability to interpret what the candles are telling you about the likely future direction of price. Candlestick tails, also called shadows, will often provide a warning that is usually best heeded....

  • Building Self-Confidence

    ARTICLE SYNOPSIS ...There are certain traits a trader needs to succeed, and self-confidence is one of them. But how do you develop it so that it benefits your trading skills? Let's find out...

  • Cultivating Patience

    ARTICLE SYNOPSIS ...What is patience and why is it essential for success in the world of trading? Let's explore...

  • Xylem, Inc. (XYL)

    ARTICLE SYNOPSIS ...The stock of XYL, the global water infrastructure company which was debuted on the New York Stock Exchange in 2011, has had a good few months. It reached a low of 31.54 on January 21, 2016 and has been in an uptrend since. It is currently making new all time highs. What does the chart say about the performance of this rather new addition to the S&P 500 index?...

  • Sometimes It's Best To Stand Aside And Wait

    ARTICLE SYNOPSIS ...With Whole Foods Market (WFM) set to announce quarterly earnings on Wednesday May 4th, 2016, what does the chart say about the performance of its stock?...

  • With Shares Of Twitter Nearing Support Is It Time To Give It A Second Look?

    ARTICLE SYNOPSIS ...Shares of Twitter (TWTR) closed on May 2, 2016 near support after several days of heavy selling. Is it now time to give the shares a second look for a possible long play?...

  • Richard Demille Wyckoff Part 2

    ARTICLE SYNOPSIS ...There are no shortcuts to becoming a successful trader. In this second of a five-part series about Richard D. Wyckoff, we look at how persistence and determination played a role in his trading career...

  • The Disposition Effect

    ARTICLE SYNOPSIS ...The psychology behind our tendency to sell winners and keep losers....

  • Is AutoZone Still a Strong Long Play?

    ARTICLE SYNOPSIS ...Will a break of resistance negate AutoZone's long term trend line break?...

  • What Does Regeneration's Bear Flag Mean?

    ARTICLE SYNOPSIS ...A bear flag is often a bearish signal. Regeneration Pharmeceuticals, Inc. is just completing one - is it too early to tell what this means for the stock?...

  • Failed Divergence

    ARTICLE SYNOPSIS ...Negatives divergences can be useful signals to alert us to possible reversals, but it is wise to remember that confirmation to enter trades must always come from price because no signal is fool proof. All trading signals can fail....

  • Ben's Fake-out Or Why You Must Trust the Chart

    ARTICLE SYNOPSIS ...Sometimes when you look at a chart, you see what has happened recently and this informs your decision about what should happen next. This decision then determines how you subsequently trade and can result in costly mistakes, especially in the case of the fake-out. For what should happen next must never be a basis for your trading decisions. The only analysis that really matters is the one that tells you what is currently happening....

  • The Bird That Shrunk After Swallowing Its Rival

    ARTICLE SYNOPSIS ...May 18th, 2016 makes it a year since Ascena (ASNA) announced its acquisition of ANN stores for a mixture of cash; financed by debt and stock. The deal created one of the largest specialty retailers in North America with a total of over 4,900 stores. In the year since the deal closed ASNA shareholders have not seen any upside value....

  • A Quick Look at CF Industries Holdings, Inc.

    ARTICLE SYNOPSIS ...A look at CF's chart will show that it topped on June 17, 2015, reaching a high of 68.10 in a buying climax marked by unusually high volume. This marked the start of its sustained and protracted downtrend. By January 20, 2016, with the stock trading at 25.57, it was down 63% from its high....

  • Richard Demille Wyckoff Part 3

    ARTICLE SYNOPSIS ...The most basic and universal laws governing goods and services in a free market are the law of supply, law of demand, and the intersection of these laws. These laws control stock prices. In this third of a five-part series about Richard D. Wyckoff, we look at how he analyzed market action...

  • Anticipating Macro Events

    ARTICLE SYNOPSIS ...As part of its 13F filings the quarter ending 3/31/2016, Barrick Gold Corp. (ABX) announced that Soros Fund Management LLC had built up a new and substantial position of some 19,419,309 shares in its company. With the results of the UK referendum currently roiling world markets, this move by the billionaire investor seems almost as stunning as his trade in 1992 in which it was claimed he made a billion dollars by "breaking" the Bank of England. On Friday, June 24, 2016, while the S&P 500 was down 75.91, or 3.59%, ABX was up 1.12, or 5.79%....

  • Richard Demille Wyckoff Part 4

    ARTICLE SYNOPSIS ...Whether you're an investor or trader, you need to know how to intelligently evaluate price action. In this fourth of a five-part series about Richard D. Wyckoff, we look at how he evaluated price action using charts...

  • Failing Successfully

    ARTICLE SYNOPSIS ...We're groomed to think of losses as a sign of failure, which is why trading is difficult. But experiencing losses is part of a trader's life and is something you have to accept. Here's how to approach the idea in a healthy way...

  • Richard Demille Wyckoff Part 5

    ARTICLE SYNOPSIS ...In this final part of our series about Richard D. Wyckoff, we look at his latter years - the changes he faced and how that affected his thoughts on investing...

  • The Endowment Effect

    ARTICLE SYNOPSIS ...The endowment effect is a bias which accounts for why traders and investors will sometimes allow themselves to get married to a position....

  • Richard Demille Wyckoff Part 1

    ARTICLE SYNOPSIS ...This article is the first of a five-part series about Richard D. Wyckoff and his contributions to the discipline that is technical analysis...

  • Protecting Profits With Strangles

    ARTICLE SYNOPSIS ...Options are often thought of as being risky and they often are, especially when you do not have a clear understanding of how they work. There are times, however, when a thorough understanding of an option strategy can help to minimize downside risk while allowing you to participate in potential upside gains....

  • Gambling, Speculating, & Investing

    ARTICLE SYNOPSIS ...What do these terms mean as applied to the participant in the financial markets? Let's have a look to try to come up with some clear definitions....

  • Decision Fatigue

    ARTICLE SYNOPSIS ...Yesterday, you made a really bad trade. After you have closed out the position at a loss, you study the chart and ask yourself why you entered the trade in the first place. The more you study the chart, the more confounded you become. Clear as the light of day is evidence that the stock is acting badly. You see price had been making lower lows and lower highs for some time, there was no break of the down trend line to the upside. So you ask yourself why did you take a long trade? All the signals were screaming that this would be a bad long trade. Yet you took it. You can't understand why ...

  • Anatomy Of A Breakdown (Part 1)

    ARTICLE SYNOPSIS ...To successfully identify a break down as it begins to happen, it is essential to learn to look for signs of technical weakness on the chart....

  • The Availability Heuristic

    ARTICLE SYNOPSIS ...When we want to judge the likelihood of something occurring, it is often the case that we will attempt to recall instances of its occurrence from memory. If retrieval is easy and many instances can be readily retrieved then we are more likely to judge the thing as likely to occur. This is the availability heuristic....

  • Representativeness Heuristic

    ARTICLE SYNOPSIS ...Representativeness heuristic is one of the many mental shortcuts that we often use to distill information and arrive at answers when faced with conditions of uncertainty. We judge something as more likely to happen because it is representative of its class. But that something is representative of a particular class, does not make it more likely to happen....

  • Bollinger Bands And Volatility Signals

    ARTICLE SYNOPSIS ...Traders use bands around price to help them determine when the price has strayed too far away from their average, either up or down. The construction of trading bands is relatively simple. Bands are placed above and below an average often using a fixed percentage. These bands can also be called envelopes. Bollinger Bands are one of the more popular types of trading bands....

  • Using Protective Stops To Help With Entries

    ARTICLE SYNOPSIS ...Sometimes people will say that the reason that they will no longer use protective sell stops is because when they have used them in the past, their stops will invariably get touched, taking them out of the trade, just before the stock reverses. It is likely that this happens, not because the market somehow knows the price at which you set your stop and then deliberately aims to take you out of the trade, but the more likely reason, is that your stop might not have been set correctly in the first place....

  • When Setups Fail

    ARTICLE SYNOPSIS ...So you have done everything right. You have followed your rules, waited for the signal, entered the trade on confirmation of that signal and what happens? The setup fails. What do you do?...

  • Fear of Regret

    ARTICLE SYNOPSIS ...The fear of regret is a cognitive bias that involves both judgment and emotion. We feel pain for having made a decision that results in a loss. Sometimes, the anticipation of that pain is so strong that it causes us to act in ways which might otherwise seem irrational....

  • Anatomy Of A Breakdown (Part 2)

    ARTICLE SYNOPSIS ...There are many tools that the technician can use to help identify technical weakness on a price chart. Indicators used correctly can provide invaluable information....

  • Sunk Cost Fallacy

    ARTICLE SYNOPSIS ...The sunk cost fallacy is a behavior that is potentially harmful to your investment success. Is there any way to overcome it?...

  • Loss Aversion

    ARTICLE SYNOPSIS ...By nature, we are wired to act in certain ways when confronted with specific situations. Being aware of these types of behavioral patterns is a first step toward conquering them. Here's a look at how we typically react to situations that arise in the financial markets....

  • How Anchoring Can Hold Us Back

    ARTICLE SYNOPSIS ...What is anchoring and why do traders need to understand it?...

  • Trading The Moving Average Convergence Divergence

    ARTICLE SYNOPSIS ...The moving average convergence divergence (MACD) is a popular indicator found on just about all software trading packages. Even though it is widely used, sometimes it is useful to return to basics, to ensure that we master the core principles to effectively use this popular technical tool in our trading....

  • Recognizing And Avoiding Confirmatory Bias

    ARTICLE SYNOPSIS ...Cognitive biases are thinking errors that affect how we process information and make decisions. We are all affected by cognitive biases in our everyday decision making but what makes them so insidious is that often we are not aware that we are acting under the influence of a cognitive bias when we form opinions or make decisions. When it comes to trading, our results rely on our ability to recognize and limit the influence that these errors of judgment can cause. Here you will find a discussion of a cognitive bias known as confirmation bias and be presented with tools to recognize it and avoid...

  • The Fear Index Or The VIX

    ARTICLE SYNOPSIS ...The VIX is a volatility index registered by the Chicago Board Options Exchange (CBOE) which has come to be known in the popular press as the fear index or the fear gauge....

  • Trading With The ADX

    ARTICLE SYNOPSIS ...Markets do not always trend. Sometimes they are range bound and as a result the tools which will be most suitable for analysis in these types of market differ from those that are useful in a trending market. A popular tool that is helpful in determining whether we are in a trending or range bound market is the average directional movement index (ADX)....

  • Information Bias, Or Why More Is Not Necessarily Better

    ARTICLE SYNOPSIS ...Information bias is a cognitive bias which leads us to believe that more information is better or complexity is preferable to simplicity. Sometimes we collect information which is ultimately irrelevant to the decision we are trying to make but we feel more confident in making the decision because of the extra, irrelevant information....

  • Overcoming Overconfidence Bias

    ARTICLE SYNOPSIS ...Overconfidence is a cognitive bias which results in our overestimating our abilities to perform a skill or task. In so doing, we see ourselves as better than average and we rate our abilities higher than others would rate us. In financial markets, this bias most often manifests itself in traders as aggressive trading or as an increase in trading volume. It is important, therefore, that we recognize this bias and find ways to effectively minimize its effects on our trading....






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