Itronics Inc (ITRO)

[Chrion]

Ickimoku Cloud

Pull up stockcharts.com
Choose Ickimoku Cloud from the indicator.
Turn the other overlays off for now, so they are not confusing.

Notice how the price is testing the top of the cloud. Since the cloud is thick, it will likely not break the cloud until it thins out in a couple of weeks. It may either push against the top of the cloud, or even retest the bottom of the cloud (a high probability) before it goes for a breakout.

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The Ickimoku Chart gives you multiple indicators all in one.

1) The cloud itself represents whether the stock is bearish or bullish long term. You use it similar to how you would use the 200 MA.

The advantage of the cloud is that it shows support and resistance as a band instead of as a line.

2) The blue and red lines are moving averages. When the blue line (fast) crosses the red line (slow) it is a buy.

If a bullish cross happens below the cloud it is a weak bullish signal, indicating the stock may still be in a down turn but a bullish corrective wave is in play.

If a bullish cross happens in the middle of the cloud, it is an intermediate buy signal.

If a bullish cross happens over the cloud it is a strong buy.

This is similar to how MACD crossovers work.

3) The green line is the momentum line. If the green line is above price it means the stock still has momentum.

**4) Thick clouds provide more resistance then thin clouds. The Ickimoku Cloud can often predict with good accuracy WHEN a breakout is likely. If the cloud is thin, it means that the support/resistance is weak. If it is challenged it has a strong likelihood of breaking.