Energy And Index Watch
Stocks: CLL CWPC HSE NKO SU TSK UTS
Don Rodgers of Price and Volume Analysis and Market Information
You will recall my posted entry of $68.65 for $65.76 on Oil. We did receive the price entry but the volume fell short. With the only rule being VOLUME VALIDATES PRICE, we saw insufficient sell volume come in to drive the price of oil lower and it climbed back higher. The same situation occurred with CWPC. My posted downside break of $4.74 with a target of $3.26 was hit, closing at $3.66. We required 9,965,414 sell side shares to come in and we received just over 7.0 million there the VOLUME DID NOT VALIDATE THE PRICE and the stock bounced higher and closed at $5.25 yesterday. By awaiting Volume Confirmation you did not go short despte the bearish sentiment and saved yourself the agony of having to take a stop on the trade.
Much the same happened with Suncor Energy. The entry of $79.15 was taken out with a close $76.00 even with 3,016,505 needed to go lower with only 2,245,464 coming in so once again the price held and we moved higher.
This is a good lesson in a number of ways. By plotting the sector, in this case oil and watching the crude price, we saw two stocks in that sector react to the rising price of crude and away from the downside targets. Had the price of one of those stocks continued lower or diverging from the sector trend you would then know the falling share price was due to a company specific event and not sector weakness. The best lesson is watching the volume. Although in three instances, Crude, CWPC and SU the charts looked bearish, the sentiment was bearish, all three rebounded and all three had one thing in common. The volume calculated was not enough to move the price lower. All three hit their entries but minus the volume.
It was good news for investors seeing the share prices climb higher but, it was done on less than stellar volume leading me to advise caution on the moves up. Until the volume pours back into these and supports the higher price moves they may in fact be setting themselves up for a new leg down. It is difficult at these pivotal points to know exactly which way the sentiment of the Big Money is going to swing so you do the prudent thing and wait it out. Fearing the big move is what gets many investors into trouble in the first place and buying too early especially when a stock is seemingly breaking out of a downtrend is the most common.
So far today looks like it is shaping up to be another Friday. Lower volume, tighter ranges and not a large degree of concensus one way or the other.
The chart for oil can be found on my website at www.entryandexitinvesting.com. Click on the green dot.
Remember, the amateurs open the market, the pro's close it.
www.entryandexitinvesting.com
Don Rodgers of Price and Volume Analysis and Market Information
You will recall my posted entry of $68.65 for $65.76 on Oil. We did receive the price entry but the volume fell short. With the only rule being VOLUME VALIDATES PRICE, we saw insufficient sell volume come in to drive the price of oil lower and it climbed back higher. The same situation occurred with CWPC. My posted downside break of $4.74 with a target of $3.26 was hit, closing at $3.66. We required 9,965,414 sell side shares to come in and we received just over 7.0 million there the VOLUME DID NOT VALIDATE THE PRICE and the stock bounced higher and closed at $5.25 yesterday. By awaiting Volume Confirmation you did not go short despte the bearish sentiment and saved yourself the agony of having to take a stop on the trade.
Much the same happened with Suncor Energy. The entry of $79.15 was taken out with a close $76.00 even with 3,016,505 needed to go lower with only 2,245,464 coming in so once again the price held and we moved higher.
This is a good lesson in a number of ways. By plotting the sector, in this case oil and watching the crude price, we saw two stocks in that sector react to the rising price of crude and away from the downside targets. Had the price of one of those stocks continued lower or diverging from the sector trend you would then know the falling share price was due to a company specific event and not sector weakness. The best lesson is watching the volume. Although in three instances, Crude, CWPC and SU the charts looked bearish, the sentiment was bearish, all three rebounded and all three had one thing in common. The volume calculated was not enough to move the price lower. All three hit their entries but minus the volume.
It was good news for investors seeing the share prices climb higher but, it was done on less than stellar volume leading me to advise caution on the moves up. Until the volume pours back into these and supports the higher price moves they may in fact be setting themselves up for a new leg down. It is difficult at these pivotal points to know exactly which way the sentiment of the Big Money is going to swing so you do the prudent thing and wait it out. Fearing the big move is what gets many investors into trouble in the first place and buying too early especially when a stock is seemingly breaking out of a downtrend is the most common.
So far today looks like it is shaping up to be another Friday. Lower volume, tighter ranges and not a large degree of concensus one way or the other.
The chart for oil can be found on my website at www.entryandexitinvesting.com. Click on the green dot.
Remember, the amateurs open the market, the pro's close it.
www.entryandexitinvesting.com
posted by douglas mcintyre at 10:39 AM
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