Trading New 78 Day High on 12Bars RSI above 60 after 200EMA Breakout

Trading New 78 Day High

after 200EMA Breakout, 12 Bars Price above 200EMA and 12Bars RSI 14 above 60.

In the quest of finding that quick move as well as taking profit in a short span of time while banking on the momentum of a stock I was able to find another pattern that when observed carefully could potentially give you a handsome profit. 

This is a Test on August 31, 2020 of EVGN which showed as one of the New 78 Day High on Stockfetcher. Please refer to my stockfetcher script on New 78 Day High on my previous blog "New 78 Day High Offset"

Fig. 1 "EVGN Daily Chart"

This is the chart of EVGN when it made it's New 78 Day High. Try to observe the points that had been numbered according to the Analysis. Better still if you open the image in a separate window so you can follow through the Analysis well.

ANALYSIS:

1. Price B/O (Breakout) on 200EMA after 2 failed attempts on High Volume
   (see 1a and 1b failures).
2. Price Retested on 200EMA. 
   NOTE 1: The Retest have an RSI above 60 
   NOTE 2: Price retest is not even touching the 200EMA
3. 30EMA B/O or crossed above 200EMA
4. B/O failure at 1.50 on August 14, 2020 and
   successful B/O at 2.50 on August 25, 2020.  
   NOTE: RSI on both Failed B/O and Successful B/O were all above 60 
                This is a very bullish signal meaning that bullish momentum is really strong.
5. B/O at 2.00 where the candle had formed an inverted hammer candle.
   NOTE: Observe well that the RSI of this candle is even very strong at 82.88
                This simply means that the bulls are ready to take on beyond $2.00.
6. The Price had always been above 200EMA for 12 bars. Observe well the price action within this span of time. It is creating a Supernova. This means that the price can still surge higher but may have a very strong pullback after. 
   
   Since #2 to #5 our bullish candle move had gone 5 bars already, we are going to Peggy back on the momentum of the last 3 bars until the 8th bar. Most significant move follows a rhythm of 8 bars before creating a strong pullback. 
7. The RSI 14 of the price after the successful 200EMA B/O had been above 60 for 12 Bars. Observe well the RSI wave within this span of time. The wave is even climbing beyond RSI 80. This is highlighted with red rectangular box shaded with yellow.

TARGET CALCULATION

If I would go with my normal way of calculating the Target Price I will use my formula of calculating it. But since I am targeting of a 3 days trade only, I have to use a different approach. However, I will still lay down my formula calculation of the Target Price, so I will know the possible price it can go higher.

NORMAL Calculation of Target Price

TP = Target Price
PH = Previous High is at $1.50 when there was first attempt to breakout the 200EMA at #1a
VL = Volatility Low is at $0.75 the lowest low before the start of #1a breakout attempt.
BC = Breakout Close. This is BC2  at 1.66 after successful B/O at 1.50

TP = ((PH-VL)*3) + BC)
TP = ((1.5 - 0.75) * 3) + 1.50)
TP = 3.91 or $4.00

Based on our calculation, the stock can probably go up to $4.00. What we would like to see is make the most of the 3 days to follow after this New 78 Day High. The $4.00 can be good for a swing trade of another 12 to 15 bars.

Immediate Calculation of Target Price for the 3 bar trade.
Here we do not even have to calculate. 

1. What I normally do is make an arrow from the close of the Breakout candle that successfully broke the 200EMA(See Fig. 2). 
2. I stretch this arrow up to the High of the last candle on August 28, 2020. See H1 arrow with a height of 0.77.
3. I clone this arrow (See Fig.3).
4. then place the cloned arrow H2 on top of the H1 arrow (See Fig.3). 
5. So if the cloned arrow starts at the New High of 2.10 which is the high of H1 arrow, this will end up a high of $2.87 (2.10 + 0.77).
6. So your Target Price on the 3 bar trade will be $2.87 or $2.85 (See Fig.3).

 

Fig. 2 Creating the arrow from the close of the Breakout Candle at $1.33 

Fig. 3 Cloning the Arrow to use as H2 and get the Target Price

ENTRY

The New High had just broken the $2.00 Whole number resistance. Most of the time, after a price breaks out of this level, it will always retest what was broken before continuing higher. So if the price had gone to $2.10, chances are that the price would somehow retrace back to $2.00. With this in mind we will set our entry point at this whole number as our entry.

Entry = $2.00

TRADE CALCULATION:

MONEY = 2,000

SHARES = 1,000

BUY @ = 2.00

BUY AMOUNT = 2.00 * 1,000 = 2,000

TP = 2.85

TARGET AMOUNT = 1,000 * 2.85 = 2,850

PROFIT = 2,850 - 2,000 = 850.00

STOP LOSS = 1.85

LOSS AMOUNT = 1.85 * 1,000 =  1,850

TARGET LOSS = 2,000 - 1,850 = 150

With all the Analysis and Calculation we tried setting up the Trade using the Prediction and Measurement Tool of Tradingview and assume a trade based on our calculations. The following chart gives you the result. A target of $2.85 had been reached. A gain of  $0.85 from the entry of $2.00. A $850 profit in just 3 days of trade on 1,000 shares on an investment of $2,000. (See Fi. 4)

Fig. 4 Target Price of $2.85 had been reached 

Trading New 78 Day High on 20 days Price above 200EMA and RSI above 60

Trading New 78 Day High
after 200EMA Breakout, 20 days Price above 200EMA and 20 days RSI 14 above 60.

In the quest of finding that quick move as well as taking profit in a short span of time while banking on the momentum of a stock I was able to find this pattern that when observed carefully could potentially give you a handsome profit. 

This is a Test on June 26, 2020 of BLNK which showed as one of the New 78 Day High on Stockfetcher. Please refer to my stockfetcher script on New 78 Day High on my previous blog "New 78 Day High Offset"

This is the chart of BLNK when it made it's New 78 Day High. Try to observe the points that had been numbered according to the Analysis. Better still if you open the image in a separate window so you can follow through the Analysis well.

ANALYSIS:

1. Price B/O on 200EMA 
2. Price Retested on 200EMA
   NOTE: The Retest have RSI above 60 
3. 30EMA B/O on 200EMA
4. B/O and Retest on 2.50 Previous Failure Feb 10, 2020
   NOTE: Feb. 10, 2020 RSI below 60 on 2.50 Failure
                Jun. 24, 2020 RSI above 60 on Retest of 2.50 
5. B/O and Retest on 2.75 Previous Failure Feb. 26, 2020
   NOTE: Feb 26, 2020 RSI below 60 on 2.75 Failure
                Jun 26, 2020 RSI above 60 on Retest of 2.75
6. Price Above 200EMA for 20 days. Observe well the price action within this span of time.
7. RSI 14 above 60 for 20 days. Observe well the RSI wave within this span of time. This is highlighted with red rectangular box shaded with yellow.

TARGET CALCULATION

TP = Target Price

PH = Previous High

VL = Volatility Low

BC = Breakout Close

TP = ((PH-VL)*3) + BC)

TP = ((2.75 - 1.25) * 3) + 3)

TP = 7.5

ENTRY

Find Previous High and use that as entry

In this case, previous high is at the tip of the Rickshaw candle on Feb 20, 2020

Entry = 3.35

TRADE CALCULATION:

MONEY = 2,000

SHARES = 597

BUY @ = 3.35

BUY AMOUNT = 3.35 * 597 = 1,999.95

TP = 7.5

TARGET AMOUNT = 597 * 7.5 = 4,477.5

PROFIT = 4,477.74 - 1,999.95 = 2,477.55

STOP LOSS = 2.75

LOSS AMOUNT = 2.75 * 597 =  1,641.75

TARGET LOSS = 1,999.95 - 1,641.75 = 358.20

With all the Analysis and Calculation we tried setting up the Trade using the Prediction and Measurement Tool of Tradingview and assume a trade based on our calculations. The following chart gives you the result. A target of $7.5 had been reached. A gain of  $4.15 from the entry of $3.35. A $2,477.55 profit in just 7 days of trade on 597 shares on an investment closed to $2,000.

Understanding the NIO Trade - MINOLA New 55 Days High - $1000 Profit that went down to $400

Trading with NIO 

A $558 Profit that turned into just $200.00 profit.

The market has all the opportunity to make you money, but you need to be decisive when to fold so that you can profit as much as you can. When the opportunity arise of having a good profit, take it and keep it in your pocket. Do not wait until it is wiped out from the table by the market. I know this needs a lot of balancing of the pros and cons. 

Here is the scenario that needs to be understood well about the trade with NIO.

NIO had enjoyed a pretty good ride with the rise of TESLA

The Electric Vehicle Industry had been surging recently, especially with the leading innovator TESLA. March 19, 2020, TESLA was just trading between $358.00 and $452.00. This was during the lockdown time of Covid-19. But 5 months later TSLA surged to a high of $2,295.00. An explosive gain that made it number 1 on all Electric vehicle makers and even surpassing General Motors in capitalization by 9.6x. GM has a capitalization of 42.96B while TSLA had now reached a capitalization of $412.4B. No wonder GM is shifting its Corvette engineering team to its electric and autonomous vehicle programs. Tesla with its historic rise had also announced a 5:1 Stock Split in order to be able to make its stock price affordable for everyone. Another catalyst of its continuous upward move

Because of the rise of TESLA, all other electric vehicle manufacturers had enjoyed a good rise in stock values. These include NIO, FUV, NKLA, WKHS and even enticed new electric vehicle maker XPEV to make its IPO debut yesterday August 27, 2020.

NIO hitting New 55 Days high with a breakout on good volume.

March 19, 2020 NIO was just merely trading between $2.23 and $2.55. That was during the lock down on Covid-19 pandemic. July 13, 2020 when businesses had been opened again with social distancing, the stock had hit a new high of $16.44. An impressive 644% increase in value. After that rise, the stock pulled-back to a new low of $10.46 on July 17, 2020 and continued to oscillate its price in contracting pattern with volume diminishing. This was the so called VCP formation or Volume Contraction Pattern. This had gone for 1 month and 20 days since July 02, 2020 when it made its first Gap-up breaking out the high of $9.00.

The pattern 39d-36/12-3T was the reading of the VCP pattern before August 21, 2020. It simply means 39days of price contraction starting with -39% and currently sitting at -12% VCP in 3 touches of contraction. On August 21, 2020, it had actually made -9% in contraction which is pretty closed to around 5 to 7% of which most of the breakout occurs. Indeed by August 25, the breakout occurred with price breaking its previous high of $16.44 and reaching to a new high of $17.87, accompanied with a strong volume. 

How the formation was caught?

This formation was perfectly shown with our stockfetcher filter MINOLA with New 55 Days High.

MINOLA is a term that combines the system of Mark Minervini, William O'Neal and Larry William. Please see previous blog on MINOLA.

Entering the trade during the breakout.

Entering during the breakout on the last half of the trading session is a good strategy to have the trade to sleep over and pop in the morning. When you notice a brekout on the VCP formation like this, try entering on the last session of the day when most of the short sellers are actually being squeezed. 

NIO on the next day, August 26, 2020 made a gap-up which shoot its price to a new high of $20.97

While the buyers are so eager to purchase more shares of NIO, that would have been the time to collect most of the profit. But knowing that breakout like this could run several days more, hanging on with the shares would be locking in more profits, especially when all the news are favorable with the stock. There is a saying which goes "Buy the rumors and sell the news." While the good news had been flying like hotcakes, it was actually a good time to sell.

REVIEWING THE NEWS

The pop would have been a good ride. Most of the time the price would continue for several days based on the positive news. And here are the positive news of NIO that made it breakout its VCP formation.

1. August 25, 2020 NIO had been upgraded from sell to neutral by the bearish UBS Analyst Paul Gong as the fundamentals of NIO had improved in Q2 of 2020 with a good guidance for Q3 of 2020. Its sales in Q2 of 2020 had also increased by 146.5% compared to Q2 of 2019. It had also surpassed the sales of Pandemic laden Q1 2020 by 177.6%. With this kind of news, you will surely have positive outlook from investors who are willing to bet on NIO.
2. August 26, 2020 NIO soared to a new high after a bullish call from Morgan Stanley. Tim Hsiao made a target of $20.50 for NIO and the report continued to explain that NIO after securing a $1 billion investment from state owned Heifi, it had actually removed the risk of not having enough capital to sustain its production of next year due to its net loss and heavy capital consumption. The target was actually reached and NIO had made a new high of $20.97.  
3.  NIO is enjoying its ride with the rise of TESLA stock. Having NIO as the next TSLA( Tesla, the leader in the electric vehicle design, quality, production, good management, revenue generation and sales). NIO had not achieved anything like TESLA yet but had made great production of SUVs that have similar technology as TSLA. Being a Chinese company, it can certainly offer at a cheaper price range with their electric vehicles. 
4. August 20, 2020. NIO during the previous days had actually made a good incentive program for the buyers to make the purchasing of its EV a lot cheaper by launching battery as a subscription service. This innovative way can lower down the cost of acquiring the car compared to its standard package. If this incentive would click, this can certainly increase their sales. Look at #1 as it had been slowly pumping higher its sales. This is really big plus for NIO.
5. With the plan of course to open more facilities in Europe, they are actually gearing up for more exposures and eventually sales. The only downside, is that they had been burning their cash massively with their production and they are in need of more capital in order to support their move. The company had a net loss of 43M in Q1 of 2020 compared to the gain of 42M Q1 of 2019. But they were able to turn things around in Q2 of 2020 when it had made 177.6%  more sales compared to Q1 of 2020. And they are getting much attention now in the market. They can certainly be the next TESLA or at least comparing to AMD and NVIDIA of Graphics Processing Unit manufacturing. Tesla is the NVDIA of EV while NIO is the AMD of EV. 
6. The Q2 2020 result still need to be carried and surpassed in Q3 and Q4. This proof of revenue is what makes the pop to be short lived, as big time investors would like to make sure that it can deliver and have all the financial ammunition to propel its ascent. The news indeed fueled for a pop from the breakout high of $17.87 to a new high of $20.97. Entering at $17.25 during the start of the breakout would have been a nice profit of $3.72.  
   
   
7.  Based on the strength of a breakout with a gap-up and a good volume, the run would have been a continuous upward move. Yet it stalled on the second day after the gap-up. This stall was actually triggered by the recent news that NIO is offering $1.5B more public offering to raise more money as a capital for their minority stake acquisition, research and development in autonomous driving, and global market development. They already have an injection from Heifi, the Chinese State owned firm which help NIO ease the burden of cash shortage. This new cash will enable them to research more on autonomous driving as well as acquire more stake of NIO China. 
   
   Despite the good intention, Big time investors do not really like to see this kind of things. So, the price of the stock most of the time would always fall. On the other hand, Capital investors would love to invest their money with companies that have great potentials. And NIO has the potential to compete with TSLA, so the capitalist would seize this opportunity. But, Capitalist would never like to buy the shares at a high price. Market Makers knew all these and would do all in their powers to basically shake the market to induce fear to other weak investors. Once these weaker hands get scared, they will all relinquish their shares to the Market Maker and Market maker will have a boot load of shares to offer to big time capitalist. Thus, we will see NIO shedding off its price in shorter time, but in the long run, will see Capitalists slowly accumulating shares of this stock. Others shares will be purchased by Morgan Stanley, China International Capital and Bank of America, who are the underwriters of this offering.

The 15min Chart of NIO showed 2 gap-downs after its Gap-UP. The first Gap-Down should have been the clue of the imminent change of direction. The price tried to close the first gap-down but could not breakout from it. It failed and it made another gap-down.

The entry we had @17.25 if sold at @20.30 after the first gap-down signal would have made a nice profit of $3.05. This would translate $915.00 on 300 shares. But letting the price slipped without analyzing what happened in the 15min chart the price had cracked down again for the second time, leaving no choice of disposing the shares @18.64. Instead of $3.05 profit it was cut into $1.39 profit translated into $417.00 profit only for the 300 shares. Greed can sometimes cloud our judgment in analyzing the stock chart. Always make sure to plan a counter attack on major signals. Breakdown is a serious signal and therefore should not be taken lightly. 15minute chart and other time frame like 5min chart are used in contracts with the 1 day chart for they provide the left and right mirrors of the stock highway. The trade was still profitable but half of the gain was taken back by the market. Good trader should not allow this to happen.

In the long term, this NIO can still be a good candidate for ore upside. An appropriate entry should be planned carefully by scribing a new VCP. 

For now, the price seemed to be closing the previous gap-up  @17.85. If might probably go down still. The best course of action is to let the market show its move and if its favorable, ride on the shoulders of the giant. If the ride is good for 2 days or just 1 day based on what you see on the chart, react accordingly and make sure not to give back the money to the market.  
 

XPEV - XPENG VEHICLE - New IPO in EV who will be competing with TESLA

 A new Chinese company had just made its debut in stock exchange today. It is called XPENG, one of the leading Electric vehicle company in China who had done a lot of production in China is now entering the US Market for electrical vehicle offering to the public.

Brian Gu, who is the Vice Chairman and President is saying that they are waiting what Elon Musk could really show during the battery day, if battery power they touted about could really reach the Electric Vehicle to run a million mile before re-charging. 

https://finance.yahoo.com/news/we-are-watching-to-see-if-tesla-and-elon-musk-will-reveal-a-millionmile-battery-xpeng-ceo-171531166.html

XPENG in their website https://en.xiaopeng.com/

have two model vehicles they are posting as their highlighted flagships. So far the following youtube videos made a pretty good review and explanation of why XPENG cars are pretty much a good buy in terms of specs and technical advancement, of which may even be better than TESLA.

1. G3 - Super Long Range Smart SUV
   
   
   
   
   
   
   
   
   
   
   
   
   
   
2. P7 - Super Long Range Smart Sedan
   
   
   
   

And here's how it looked like in its 5min chart debut.

 XPEV open at $25.00 and get hammered down to $22.33 but was able to get back immediately to its high of $25.00 in just 3 sessions after its pullback. Yet from then on it just continued to slide downward to a low of $22.57 and kept hovering on that level. So far financially wise, this manufacturer will have to prove first its performance, sales and revenue and not just its fancy look and low price scheme. You can keep this stock on your watchlist for now but not yet in your portfolio.

AMD - huge run after VCP - $53.00 or 189% profit after a year

 Last Jul 5, 2019, I sent out an email about my analysis on AMD.

This was the content of that email.

1. This AMD formation is the 3rd VCP from the Darvas Base of $16-$20 range. See Darvas Box (range: $16-$20)
2. The Failed top of June 10, 2019 on $34.00 formed Double top against Sep. 13, 2019. Therefore you can expect the stock to retest key support levels before bouncing up against this $34.00 resistance.
3. The possible key supports are the whole number $30.00 and $28.85 near the close of the 2 candles supported with 2 green big volumes. See circled supporting volumes and their corresponding candles.
4. If you count the number of bars associated from previous breakout to breakout on the VCP, the count is consistent with 48 bars. See VCP 1, VCP 2. So if it follows the same pattern, we can deduce that around August 5, 2019, there is a possible breakout from VCP 3. I could be wrong, but that is a probability based on the pattern.  
5. The entry range will be based on the retest of the top on each previous breakout. See again VCP 1 and VCP 2. All consecutive drop of candles stop just right about the high of each previous candle trying to penetrate from the bottom left side of each VCP triangle. See the blue arrows pointing upward. So the possible entry range will be between $28.85 to $30.00, which are the support levels in this case.
   WARNING: Make sure to calculate your profit target and your Stop Loss before entering a trade.
6. A strong volume is needed to breakout the $34.00 resistance, otherwise it will continue to drop and retest again another key support before creating a triple top.
7. If you enter on 28.85, make sure to place a stop loss at 27.50.

Check the chart I loaded up with my analysis. https://www.tradingview.com/x/d1kGZGUu/

Cheers and have a good one.

My advise at that time is to position around $28.85 to $30.00. Had you done so, you could have made around $53.00 profit.

Today is August 12, 2020 1 and a half after.

And here is the chart of AMD. 

TSLA - Tesla just made a 5 to 1 Split

Tesla during the early Feb 2020 had made a high of $968  which bottomed to a low of $350 during the lock-down because of Covid-19 pandemic. But since then it made all time high of $1794 around July 13, 2020 when some key businesses had been opened. The historic rise was also due to the fact that Electric vehicles had been hyped throughout all multi media channels adding the good revenue of Tesla and its turn around into massive production after the injection from the US government. Almost throughout the entire pandemic the talk of the day is about electric car and Tesla is the number 1 being talked about skyrocketing the value of the company with a capitalization of $264.37B making it 6.6 times greater than General Motors sitting at $40.042B. This made Elon Musk to become the 5th richest man in the world with a net worth of $74B surpassing Warren Buffet.

The catalyst of the its move was significantly due to the fact that it had surpassed the analyst prediction of Wall Street. During its 2nd quarter where in the analysts have predicted only a delivery of 20K vehicles, Tesla made a surprising delivery of 90K vehicles. Its loss of $1B last 2019 had now been a turn around of a net income of $197M. Musk had delivered despite all the negative criticism and oppositions from Wall Street itself and the Billionaires from the auto industries. Tesla has now become the leader in the electric vehicles and would even become the leader of the entire auto industry, if the rest of the other gas-fueled vehicle manufacturers could not make or compete with Tesla's dominance. It's giga factory for batteries that would enable its car to run not just 200miles before re-charging but run a million miles is phenomenal. Perhaps this breakthrough, would negate any other car manufacturers to take the lead as they are all falling behind now against Tesla.  

 And today, Tesla had just announced a 5:1 stock split which will enable its high price to be more affordable to retail investors and traders and even quintupling the shares of Big Fund managers and Insiders. It is currently sitting at $1,515.72 as of this writing. This maneuver by Elon Musk is a replica of what Apple had done with their high profile stock which had undergone a stock split to allow more buyers to take position. So if you buy 1 share at $1,500 of TSLA you will end up having 5 shares of $300.00/share. And most of the time, very good companies who makes a split would usually be able to carry the price again back to its former high after the split. Tesla has all the potential to do so when gas-fueled cars are later on going to be phased out against eco-friendly cars. And Tesla is even touted to probably hit $7,000/share. If you can position today or had already have a position, you are in for a bull ride.

   

AG - New 78 Day High - Breakout - Gap-Up - Doji - High Volume

AG

We look for 6 Clues:

1. Price Breakout on 200MA
2. Retesting or Re-Breakout of Price on 200MA
3. 50MA Breakout above 200MA
4. Volume Breakout against multiple volumes
5. Gap-Up
6. Doji Candle or Rickshaw Candle formation

AG Daily Chart - July 21, 2020

AG Daily Chart - Result after Gap-Up

EXK - New 78 Day High - Breakout - Gap-Up - Doji - High Volume

EXK 

We look for 6 Clues:

1. Price Breakout on 200MA
2. Retesting or Re-Breakout of Price on 200MA
3. 50MA Breakout above 200MA
4. Volume Breakout against multiple volumes
5. Gap-Up
6. Doji Candle or Rickshaw Candle formation

EXK Daily Chart - July 21, 2020

EXK Daily Chart - Result after Gap-Up

PSLV - New 78 Day High - Breakout - Gap-Up - Doji - High Volume

PSVL - Jul 21, 2020

PSLV - Daily Chart

PSLV - Weekly Chart

ANALYSIS:

RESULT

SPPI - How to Profit on Price Volume Anomaly

SPPI

The scenario:

1. Aug 10, 2016 Heavy Sell out from a high of 6.90 to a low of 5.61. Huge red candle and huge red volume amounting to 3.73M shares. 
2. Price dipped to the low of 3.20. 
3. Feb 10, 2017 Price broke out above 200ema but with small volume.
4. Price continued to rise up to a high of 6.80 but got slapped back when it hits that SUPPLY 1 / RESISTANCE 1 level. This is the previous high when it dropped heavily last Aug. 10, 2016 with a volume of 3.73M.(See #1)
5. It found support at 5.72 on a thin volume on Mar 9, 2017. This support is where the demand level is found. This is when the price broke out of the previous low of Aug, 10, 2016 on its large bearish candle. (See #1) 
6. March 17, 2017 a huge volume came popping up but surprisingly with just a small candle. This is our first Anomaly.
7. April 20, 2017 Price breaks out of 6.80 with a bit of volume at 1.75M, but not enough as to break out the 3.73M of Aug. 10, 2016. If this would be a true breakout, the breakout volume (B/O Vol) should exceed the red Drop Volume (Drop Vol) of Aug. 10, 2016. This is the second anomaly. The breakout may run only for few days just to hit RESISTANCE 2 or SUPPLY 2, the previous high at 7.65. Smart Money is not buying at this level yet. 
8. We created a Channel by connecting all the Highs and the Lows of SPPI starting from its lowest low. (See Upper and Lower Channel). We expect a resistance at at Supply 2 level around 7.65. Rounding this to quarters, the resistance would be around 7.75, which could rest just right at the upper channel. Since the Smart Money is not buying at this level, Market Maker will be forced to shake the tree and create a scare or sting to the retail investors and collect again the shares for the possible heavy demand of Smart Money at a Retest Level.
9. Possible level Smart Money are waiting for a retest. 

How to profit on this run.

1. Since we know that there are anomalies of the bullies volumes and candles, we could say that the bullish run from the breakout might last only for few days and get slapped at Supply 2. Entering at 7.00 and putting at stop 25cent below it with a profit target up to Supply 2 / Resistance 2.
2. We will reverse our move once we see a triple top at 7.75 and short the stock with a target on the Retest Level. 
3. We can also avoid #2 if you do not like shorting stock. You can join the Smart Money in buying wholesale at RETEST LEVEL.

Setting up the trading game with Accelotrade:

Go to accelotrade.com and create your game to test your ability in trading this scenario. If you haven't have any account yet with Accelotrade, just register, it is for free right now. 

Here is the setting when creating the game:

We are creating 2 games here.

1. SPPI_JRTraders_PriceVolAnomaly_01 (30days, April 20, 2017
2. SPPI_JRTraders_PriceVolAnomaly_02 (130 days, May 20, 2017)

  

Winning Patterns on Weekly Charts + Bullish Engulfing Candle with N Pattern

SOLAREDGE

SEDG

OESX - Orion Energy Ord

THE N PATTERN After Bullish Engulfing Candle with huge Volume

RVP Made a New 78 Day High last May 4, 2020. It made new high again for 6 days but failed to hold it. Nevertheless, it pulled back just slightly above the mid section of its breakout candle and breaks out of the high of May 4, 2020. The pattern of its move showed an italic letter "N". After that pattern, Price kept going upward despite low volume. The Big guns are slowly acquiring position in smaller quantities, distributing their buys in succeeding days. 

RVP on July 27, 2020 exhibited some kind of abnormality in its price action. This could be a signal of something about to reverse. This is an exit signal. The big guys are not supporting anymore with the move. The price is being moved by just the retail investors, small time traders who are late into the game. Upper channel is also reached. 

RVP made New 78 Day High on April 8, 2020 with a bullish engulfing candle breaking out the failed high at $1.74 when it had a volume of more 3,757% from its normal daily volume last March 30, 2020. 

That March 30, 2020 was a first attempt to breakout at 1.74 but failed due to presence of many sellers. The high volume though represented a very strong interest of the stock. Price pulled back lower than the low of that March 30, 2020 breakout candle. Now if you trace the formation from March 30, 2020 to April 8, 2020 a letter "N" formation occurred. The candle is also accompanied with volume higher than the red volume which caused a down day on March 31, 2020.

 In 17 days, the target of 3.86 had been captured and price went even more to $5.00 on May 4, 2020. The volume had surged again for another 350% on top of the volume that made a significant rise of 3,757% on March 30, 2020. 

The Secret to Following all Stocks by Larry William using Comparative Strength. Study on SVM, LIFE, RADA, and SNAP, BLFS, FUV

SPOTTING ACCUMULATION

"To spot professional accumulation, all we need to do is find an example of steady and determined buying in the face of a weak stock market. When this happens we have a good idea that professional buying is taking place." (The Secret of Selecting Stocks for Immediate and Substantial Gains", by Larry Williams, p. 14)

SPOTTING DISTRIBUTION

"Professional Selling will show up when we see consistent and determined selling in the face of a strong market. When the Market is surging, but selling pressures enter a particular stock, we can bet that we have a stock undergoing professional, informed selling." (The Secret of Selecting Stocks for Immediate and Substantial Gains", by Larry Williams, p. 14)

COMBINING IT WITH STOCK CHART

ACCUMULATION DETECTION

Look for Bullish Divergence. When a stock fails to be severely affected by the selling pressure of the overall market, then there is Bullish Divergence. The bullish divergence of the stock is when it goes against the overall selling market direction and rally heavily upward when the overall market is trending higher.

BELOW IS A COMPARISON OF LIFE AND NASDAQ

NASDAQ INDEX - 2020/07/20

FUV - 2020/07/20

LIFE VS NASDAQ

There is a small activity going on with LIFE but the volume seemed not to be supporting it. Maybe this is the beginning or is waiting for another pull-back before Volume comes in.

SVM VS NASDAQ

SVM is rallying strongly higher than NASDAQ

SVM vs DOW

SVM is showing strong divergence upward against falling DOW Jones

SVM by itself

SNAP VS NASDAQ AND DOW JONES

SNAP VS NASDAQ AND DOW JONES

SNAP 2020/07/20

If you see the chart carefully, SNAP is outpacing the upward strength of NASDAQ in orange line and diverging upward against the downward strength of DOW Jones in purple line. By Larry William's theory, this stock is under accumulation.

Based on Volume and Price Action Analysis, there are 2 huge red days but very small volume noticeable with SNAP. These were June 26, 2020 and Jul 16, 2020. SNAP had actually just broken out its previous high of $24.00 from its Debut day. It had now broken $25.00. If it holds on $25.00 or at least hold on its $24.00 support then this stock will continue to rise. 

RADA VS NASDAQ AND DOW Jones

RADA 2020/07/20 VS DOW & NASDAQ

RADA 2020/07/20 Volume-Price-Action

RADA against DOW is clearly exhibiting strong divergence upward against DOW's (in purple) direction. And comparing it with NASDAQ, it had shown aggressive upward move with much volatility against NASDAQ's rising price action.

Looking at the Volume Price Action Chart of RADA, it had experienced double top around $6.50 that is why it could not hold the price there and it had to come falling down. There are however 2 huge volume support which come from Sep 16, 2019 and Jan 06, 2020 which are waiting to hold the price at around $5.83. If the price does not break down $5.50 then we will have a potential for continuation of its move upward.

 

BLFS VS NASDAQ and DOW JONES

BLFS 2020/07/20 VS DOW JONES

BLFS 2020/07/20 VS NASDAQ

BLFS 2020/07/20 Breakout on Previous High

Against Dow Jones, it is clearly seen that BLFS is showing strong divergence going upward while DOW Jones was merely trading on range. If we check how it fared against NASDAQ, it basically showed a strong upward move that is a lot stronger than NASDAQ's rise. And what is so noticeable is that the strong move upward is supported with huge volume as well. This is really accumulation.

This is the calculation we had with the kids when we reviewed BLFS last 2020/07/02

TP = Target Price

PH = Previous High

VL = Volatility Low

TP = ((PH-VL)*3)+BC)

TP = ((17.29 - 11) * 3) + 18.96

TP = 37.83

1ST PULL @ 20

2nd PULL @ 27

3RD PULL @ 37.83

ENTRY RANGE: 15.30 to 17.30

At the current move this entry has not been materialized. We should have moved the entry closer to the close of 17.98 when it had the huge candle on July 2, 2020 backed with heavy volume of 3.7M compared to the normal volume of between 100-400M shares.