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Definition of a "Swing Trade"...
A "Swing" Trade is defined as a trip from "Gathering Resistance" to "Gathering Support" or vise-versa.
Tuesday's 4-member area of "Gathering Support" (Buy Trigger) is composed of:
1) $38.87 - the previous month's Close
2) $38.82 - the Weekly Pivot
3) $38.75 - the Daily "S2" Pivot Point
4) $38.70 - the "20-Week Moving Average"
These 4 individual aspects of Support going into Tuesday's trade form an area of concentrated Support or "Gathering Support" because each one resides no more than 10 cents from its neighbor:
QQQQ - Friday's 5-Minute Chart
The QQQQ performed "according to Hoyle" on Friday by continuing its rally up and out of the Symmetrical Triangle, a "continuation pattern", that had formed on the 5-Minute Chart.
Only an area of Gathering Resistance was able to stop its progress.
Friday's area of "Gathering Resistance" was composed of the following 3 individual aspects of Resistance:
1) $49.14 - the late June peak
2) $49.16 - the Daily "R2" Pivot Point
3) $49.24 - the Weekly "R2" Pivot Point
The QQQQ penetrated Friday's area of "Gathering Resistance" twice and pulled back both times:
Friday's area of "Gathering Resistance" was emailed on Thursday evening to "Support & Resistance Report" subscribers.
AKAM - Thursday's "Sell" Trigger...
The 'Support & Resistance Report' identifies areas of Gathering Support (Buy Triggers) and Gathering Resistance (Sell Triggers) for each day's trade.
The attached 5-Minute Chart shows how AKAM penetrated Thursday's area of "Gathering Resistance" (Sell Trigger) on two occasions and pulled each time.
Thursday's area of "Gathering Resistance" was emailed on Wednesday evening to "Support & Resistance Report" subscribers.
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Tuesday's Economic Reports...
The following 5-Minute Chart demonstrates the importance of being aware of which Economic Reports are being published within the trading day and at what time they are being published:
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QQQQ Tuesday's 5-Minute Chart...
The attached 5-Minute Chart shows the how the QQQQ penetrated Tuesday's area of "Gathering Resistance" (Sell Trigger) in the morning and then pulled back in the afternoon.
Tuesday's area of "Gathering Resistance" was emailed on Monday evening to "Support & Resistance Report" subscribers.
http://www.support-resistance-report.com
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QQQQ - Friday's 5-Minute Chart...
shows the QQQQ performing a standard 3-wave pullback from Thursday's area of "Gathering Resistance". Note how Support was found at the rising "200-Period Moving Average".
Thursday's area of "Gathering Resistance" (Sell Alert) was emailed on Wednesday evening to "Support & Resistance Report" subscribers.
http://www.support-resistance-report.com
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QQQQ - Nightly Comments...
Subscribers to the Support & Resistance Report recieve not only areas of "Gathering Support" (Buy Alerts) and areas of "Gathering Resistance" (Sell Alerts), they also receive nightly comments on the QQQQ, including what to watch for in the next day's trade.
Here is an example from last Tuesday evening's comments:
Today's Results (For Tuesday, August 15th):
The QQQQ changed its tune on Tuesday. Instead of selling off after a strong open, as has been its custom in recent days, it held its gains and added to them into the close, and it did so on rising volume:
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID735617
The following 5-Minute Chart shows how the QQQQ pulled back from its initial approach to Tuesday's area of "Gathering Resistance", then recovered to capture "Gathering Resistance" in the afternoon, thereby, issuing a warning shorts:
For Wednesday, traders must realize that they are dealing with a new, more positive QQQQ, at least in the short-term.
A close above its "50-Day Moving Average" and the Summer's previous high ($37.63) on increasing volume suggests that the next leg up of the "Summer Rally" has begun.
Odds of a successful trade now favor purchases upon pullbacks to Support.
Interpreting the ADX Indicator (Daily Chart):
The thick black ADX Line which turned up from its long decline on Monday, continued to rise on Tuesday. An ADX Line that trends up suggests that the trading range is over and that a new trend is developing. Since the thin green line (buying pressure) is above the thin red line (selling pressure), the new trend is up.
An ADX Line that turns up and begins to rise is a sign that a new trend may be developing. If the thin green line is above the thin red line and rising, then the new trend will be up. If, however, the thin red line is above the thin green line and rising, then the new trend will be down.
QQQQ - Thursday's 5-Minute Chart...
shows the QQQQ rising to Thursday's area of "Gathering Resistance" (Sell Trigger) and then pulling back from there:
Thursday's area of "Gathering Resistance" was emailed on Wednesday evening to "Support & Resistance Report" subscribers.
www.support-resistance-report.com
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QQQQ - Wednesday's 5-Minute Chart
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The QQQQ slugged its way to the upper end of Monday's thick area of "Gathering Resistance" only to find itself exhausted by the effort:
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When an area of "Gathering Resistance" is wider than usual, as it has been over the last few trading days, whether one should establish a short sale at the front door, or in the middle or near the top of that area can be a difficult question.
One tried and true technique in these cases is to allow the "20-Period Moving Average" of a 5-Minute Chart be your guide.
1) When a "20-Period Moving Average" is rising and
2) the price of the QQQQ is trading above it and
3) finding Support upon pullbacks to it...
then it's always a good idea to postpone a short sale until the "20-Period Moving Average" stops rising and the price of the QQQQ begins to trade below it. The 5-Minute Chart above shows how well that technique would have worked in dealing with Monday's wider than usual area of "Gathering Resistance".
Areas of "Gathering Support" and "Gathering Resistance" that apply to the next day's trade are emailed each evening to subscribers to the Support & Resistance Report.
The chart below illustrates the importance of knowing where "Gathering Support" and "Gathering Resistance" are located going into each day's trade
Subscribers received the location of Tuesday's area of "Gathering Support" on Monday evening. They received the location of Wednesday's area of "Gathering Resistance" on Tuesday evening:
The proof is in the pudding. The charts that I post here invariably show how "Gathering Support" has an uncanny ability to catch a falling price and how "Gathering Resistance" has the same ability to stop a rising price.
QQQQ - A Swing Trade Long...
The Support & Resistance Report strategy defines a "Swing" Trade as a trip from "Gathering Support" to "Gathering Resistance" or vise versa.
The following 5-Minute Chart shows how a "Swing Trade Long", opened at Tuesday's area of "Gathering Support" between $36.26 and $36.32 could have been closed anywhere within Wednesday's substantial area of "Gathering Resistance":
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The QQQQ presented traders on Tuesday with the volatility that customarily follows a 2:15pm interest rate announcement.
The following 5-Minute Chart shows what happened at 2:15pm...first up...then down into Tuesday's area of Gathering Support...then up...then down...and finally, up into the close:
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IMCL Double Play...
The Support & Resistance Report issued the following Buy and Sell Alerts for IMCL going into Thursday's trade:
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AKAM, GLD, PEIX and QCOM...
The Support & Resistance Report issued the following Buy and Sell Alerts going into Thursday's trade:
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QQQQ - Thursday's 5-Minute Chart
The 'Support & Resistance Report' identifies areas of Gathering Support (Buy Triggers) and Gathering Resistance (Sell Triggers) for each day's trade.
The following 5-Minute Chart shows how the QQQQ rose to the upper end of Thursday's wider than usual area of "Gathering Resistance" before pulling back to close slightly below it:
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QQQQ - Wednesday's 5-Minute Chart
The 'Support & Resistance Report' identifies areas of Gathering Support (Buy Triggers) and Gathering Resistance (Sell Triggers) for each day's trade.
The following 5-Minute Chart shows how the QQQQ rose to the upper end of Wednesday's wider than usual area of "Gathering Resistance" before pulling back to close slightly below it:
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PEIX - Tuesday's 5-Minute Chart
The 'Support & Resistance Report' identifies areas of Gathering Support (Buy Triggers) and Gathering Resistance (Sell Triggers) for each day's trade.
The following 5-Minute Chart shows how PEIX pulled back from Tuesday's area of "Gathering Resistance":
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QQQQ - Friday's 5-Minute Chart
The 'Support & Resistance Report' identifies areas of Gathering Support (Buy Triggers) and Gathering Resistance (Sell Triggers) for each day's trade.
The following 5-Minute Chart shows how the QQQQ pulled back from its initial approach to Friday's area of "Gathering Resistance" and then climbed back to challenge it again into the close:
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QQQQ - Lessons from a 5-Minute Chart
The 'Support & Resistance Report' identifies areas of Gathering Support (Buy Triggers) and Gathering Resistance (Sell Triggers) for each day's trade as illustrated in the chart below.
Wednesday's 5-Minute Chart:
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QQQQ - Lessons from a 5-Minute Chart
The 'Support & Resistance Report' identifies areas of Gathering Support (Buy Triggers) and Gathering Resistance (Sell Triggers) for each day's trade as illustrated in the chart below.
Monday's 5-Minute Chart:
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QQQQ - Lessons from 5-Minute Charts
The 'Support & Resistance Report' identifies areas of Gathering Support (Buy Triggers) and Gathering Resistance (Sell Triggers) for each day's trade as illustrated in the charts below.
Tuesday's 5-Minute Chart:
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Thursday's 5-Minute Chart:
Friday's 5-Minute Chart:
Chart & Comments for QQQQ...
QQQQ (5 Minute Chart):
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Chart & Comments for QQQQ and QCOM...
The areas of Gathering Support and Gathering Resistance on the "Support & Resistance Report" Spreadsheet provide specific information about whether you should be in a trade or, perhaps more importantly, out of a trade.
Success in using the "Support & Resistance Report" Strategy depends entirely on how well the following 4 Trading Rules are observed:
1) When the price of a stock falls to an area of "Gathering Support" and is unable to fall below it (as is often the case with "Gathering Support", at least upon first approach), then it is time to venture a purchase. Trading Rule #1 applied to the QQQQ during Tuesday's trade (See the respective 5-Minute Charts below.)
2) When, however, the price of a stock falls to an area of "Gathering Support" and then breaks below it, it is a sign of extraordinary weakness, a warning to close a long position (and to venture a short sale).
3) When the price of a stock rises to an area of "Gathering Resistance" and is unable to rise above it (as is often the case with "Gathering Resistance", at least upon first approach), then it is time to venture a short sale. Trading Rule #3 applied to QCOM during Tuesday morning trade (See the 5-Minute Chart below.)
4) When, however, the price of a stock rises to an area of "Gathering Resistance" and then breaks above it, it is a sign of extraordinary strength, a warning to close a short position (and to venture a purchase). Trading Rule #4 applied to QCOM during Tuesday afternoon trade (See the 5-Minute Chart below.)
Note: How a stock behaves after it reaches an area of "Gathering Support" or "Gathering Resistance" is best observed using a 5-Minute Chart. That's because a 5-Minute Chart shows the details of how an area of "Gathering Support" or "Gathering Resistance" invariably serves as a boundary that supports a falling stock or suppresses a rising stock:
QQQQ (5 Minute Chart):
QCOM (5 Minute Chart):
Chart & Comments for AKAM, BBBY, NVDA and DNA...
The areas of Gathering Support and Gathering Resistance on the "Support & Resistance Report" Spreadsheet provide specific information about whether you should be in a trade or, perhaps more importantly, out of a trade.
Success in using the "Support & Resistance Report" Strategy depends entirely on how well the following 4 Trading Rules are observed:
1) When the price of a stock falls to an area of "Gathering Support" and is unable to fall below it (as is often the case with "Gathering Support", at least upon first approach), then it is time to venture a purchase. Trading Rule #1 applied to AKAM, BBBY and NVDA during Friday's trade (See the respective 5-Minute Charts below.)
2) When, however, the price of a stock falls to an area of "Gathering Support" and then breaks below it, it is a sign of extraordinary weakness, a warning to close a long position (and to venture a short sale).
3) When the price of a stock rises to an area of "Gathering Resistance" and is unable to rise above it (as is often the case with "Gathering Resistance", at least upon first approach), then it is time to venture a short sale. Trading Rule #3 applied to DNA during Friday's trade (See the 5-Minute Chart below.)
4) When, however, the price of a stock rises to an area of "Gathering Resistance" and then breaks above it, it is a sign of extraordinary strength, a warning to close a short position (and to venture a purchase).
Note: How a stock behaves after it reaches an area of "Gathering Support" or "Gathering Resistance" is best observed using a 5-Minute Chart. That's because a 5-Minute Chart shows the details of how an area of "Gathering Support" or "Gathering Resistance" invariably serves as a boundary that supports a falling stock or suppresses a rising stock:
AKAM (5 Minute Chart):
BBBY (5 Minute Chart):
NVDA (5 Minute Chart):
DNA (5 Minute Chart):
An Excellent Guide to Succesful Trades:
Trading Rule #2 below applied to Wednesday's trade in that the QQQQ broke below Wednesday's area of "Gathering Support" between $38.64 and $38.77.
The Support & Resistance Report is an excellent guide to successful trades.
Much depends, however, on how well you listen to what the purple areas of Gathering Support and Gathering Resistance are telling you to do.
The purple areas provide specific information about whether you should be in a trade or, perhaps more importantly, out of a trade.
1) When the price of a stock falls to an area of "Gathering Support" and is unable to fall below it (as is often the case with "Gathering Support", at least upon first approach), then it is an appropriate time to venture a purchase.
2) When, however, the price of a stock falls to an area of "Gathering Support" and then breaks below it, it is a sign of extraordinary weakness and a warning to close a long position (and to venture a short sale).
3) When the price of a stock rises to an area of "Gathering Resistance" and is able to rise above it (as is often the case with "Gathering Resistance", at least upon first approach), then it is an appropriate time to venture a short sale.
4) When, however, the price of a stock rises to an area of "Gathering Resistance" and then breaks above it, it is a sign of extraordinary strength and a warning to close a short position (and to venture a purchase).
QQQQ (5-Minute Chart):
Chart & Comments Updated for QQQQ...
The 'Support & Resistance Report' identified a 2-member area of Gathering Resistance (Sell Trigger) between $39.02 and $39.09 going into Friday's trade, and so it was found to be.
After printing a high of $39.14, Resistance was found.
The QQQQ pulled back to a subsequent low of $38.68.
QQQQ (5 Minute Chart):
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Resistance, when captured, becomes Support...
The QQQQ demonstrated one of the principles of Support and Resistance in action on Thursday.
It's area of Gathering Resistance stood between $38.14 and $38.28 going into Thursday's trade.
The QQQQ found Resistance at that area upon its first approach, as is usually the case with an area of "Gathering Resistance".
The 2:15pm FOMC interest rate announcement, however, triggered a big push up that captured Thursday's area of "Gathering Resistance" by printing a high of $38.50.
A subsequent pull back to the upper end of Thursday's area of "Gathering Resistance" found Support at $38.26 from which the QQQQ continued its rally into the close.
That action demonstrates one of the principles of Support and Resistance that states, Resistance, when captured, becomes Support.
Thursday's area of "Gathering Resistance" (Sell Trigger) was transformed into an area of "Gathering Support" (Buy Trigger) when it was captured by a rising QQQQ.
QQQQ (5-Minute Chart):
Chart & Comments Updated for AMZN...
The 'Support & Resistance Report' identified a 2-member area of Gathering Resistance (Sell Trigger) between $37.00 and $37.05 going into Monday's trade, and so it was found to be.
After printing a high of $37.17, Resistance was found.
The AMZN pulled back to a subsequent low of $36.43.
AMZN (5 Minute Chart):
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Chart & Comments Updated for the SMH...
The "Support & Resistance Report" identified a 2-member area of "Gathering Support" (Buy Trigger) between $32.53 and $32.57 going into Tuesday's trade (June 20th), and so it was found to be.
After printing a low of $32.51, Support was found.
The SMH rose 58 cents to a subsequent high of $33.09.
(See the 5-Minute Chart below).
Traders who use the "Support & Resistance Report" in combination with the "Medved QuoteTracker" received a real-time "Buy" Alert on Tueday as soon as the SMH reached its area of "Gathering Support".
SMH (5 Minute Chart):
Chart & Comments Updated for AKAM...
The "Support & Resistance Report" identified an area of Gathering Support between $29.99 and $30.01 going into Monday's trade (June 19th), and so it was found to be.
After printing a low of $29.90 on Monday, Support was found. AKAM rose $1.87 to a subsequent high of $31.77 on Tuesday, June 20th. (See the 5-Minute Chart below).
Traders who use the "Support & Resistance Report" in combination with the "Medved QuoteTracker" received a real-time "Buy" Alert on Monday as soon as AKAM reached its area of "Gathering Support".
AKAM (5 Minute Chart):
Chart & Comments Updated for RIMM...
The 'Support & Resistance Report' identified a 3-member area of Gathering Resistance (Sell Trigger) between $64.84 and $64.89 going into Monday's trade, and so it was found to be.
After printing a high of $64.90, Resistance was found.
RIMM fell $3.24 to a subsequent low of $61.66.
RIMM (5 Minute Chart):
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Duplicating My Results...
zelareka,
For Swing Trades (Long and Short), it's not difficult to duplicate my results. That's because the rules for entering and exiting a Swing Trade leave little room for guess work...A Swing Trade is defined as a trip from Gathering Support to Gathering Resistance or vice versa.
For Day Trades (Long and Short), the rules for exiting are not as clear cut as are those for exiting a Swing Trade.
One approach that I use relies on the "20-Period Moving Average" and the "50-Period Moving Average" on a 5-Minute Chart.
For example, if a Day Trade Long is ventured at an area of Gathering Support and the price then rises to find Resistance at one of the two Moving Averages, it is often a good time to close the trade.
Tuesday's price action in the QQQQ provided 4 separate opportunities to venture a Day Trade Long at an area of Gathering Support between $37.30 and $37.39 (represented by the area in light blue on the 5-Minute Chart below).
The first Day Trade Long was entered when the QQQQ fell to within Tuesday's area of Gathering Support by printing a low of $37.31. Support was found. The QQQQ rose 49 cents to a subsequent high of $37.80.
$37.80 placed the QQQQ at Resistance at its declining "50-Period Moving Average" where, based also on the MACD Indicator, the trade was closed. (One little know trading rule states that a stock rarely rises beyond its "50-Period Moving Average" when its MACD is below the "0" Line. At the time that the QQQQ was bumping up against Resistance at its "50-Period Moving Average", its MACD was far from the "0" Line.)
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