BioSante Pharmaceuticals, Inc. (BPAX)

[dmlabuda]

Very good question! When you first start using multitimeframe charts, it appears to be confusing at first until you realize that the longer the chart period, the longer the potential for a trade. I like to follow the Weekly, Daily, Hourly, and 15-minute charts. When I look at a stock for the first time, the weekly chart is the most important to determine what the BIG picture is and where the price has been heading. In the case of BPAX, for instance, the current price of the stock is trading below the 200 candle average on the weekly chart so, the BIG picture is a downtrend and you can expect the price to continue down until acted on my an outside force (increased volume and a price reversal). We saw that happen back at the end of 2011 and since that time, the price has risen steadily on the weekly chart although its still trading below all of the moving averages on the weekly chart. You will also notice on the weekly chart that the RSI dipped into the Oversold area for the fist time since the end of 2008. So, at first glance, it appears to be a major market bottom as of December 2011. To confirm that, you check the other three charts and you will see that there was a time in December of 2011 when all three charts were giving Oversold readings. That was the perfect time to buy BPAX. The daily chart can provide you with strategic places to take profits following your entry point on 12/2011. On the three month daily chart (below) you can see that the RSI peaked at being Overbought on February 6th. Had you continued to hold on to it, you will see that on February 15th, the new high price created a bearish divergence between the price and the RSI. Anytime you have a bearish divergence between the high price peaks and the RSI, Stochastics, or %R, that is a pretty good sell signal and time to take profits because usually, the price will go down from that point on for a while at least. We also had a 50-million share trading day at the highest prices since you bought back in December. You always want to look for higher volume at the top and bottom of major market swings. So, you should have been able to double your money at least on that trade. What now? Well, it took the RSI on the Weekly chart three years to bottom out so, I don't think you want to wait three years for another trade, so lets watch the daily chart now. You will notice that the trend remains up and the RSI stays around 50 indicating that uptrend remains in tack so, you wait for the Stochastics and %R to dip into Oversold territory and give you a reason to consider buying back in. The Stochastics were just hovering around 20 and just dipped into Oversold territory so for further confirmation, you take a look at the hourly chart. On the hourly chart, as you know, there is a head and shoulders TOP formation indicating that it is very likely that prices will continue going lower over the short-term. Weekly chart = long term. Daily chart - Mid-Term. Hourly chart = Short term. 15-minute chart is primarily used for timing our entries and exits when both the hourly and 15-minute chart are providing Oversold or Overbought conditions). I hope that gives you an idea of how I use the 4 charts to manage my trades. BPAX - Daily Candlesticks