Wednesday, July 20, 2005 7:32:01 PM
Trade Talk: CITIGROUP Analysis by Price and Volume
nlightn- Excellent question. This is the kinda question that puts all of us in the learning mode.
From my study of “the language of the market”, it might’ve been a little late in the game of shorting the Citigroup, perhaps by about a month. This chart that I prepared for you should be quite self-explanatory. And, of course, from a contrarian point of view, we’d want to stay away when everyone’s on the same side. In fact, we may have to go to “the other side” – a hedge play on the long side. I’ll come back to that.
One additional footnote on CMF (Chaikin Money Flow)… And this is for my iHub buddy billkat as he had asked me about the money flow before. It’s a derivative of the Accumulation/Distribution indicator. It’s a ratio of the total Accumulation/Distribution to the total Volume. Thus, CMF starts to move up when the stock’s being accumulated. And, when the stock’s being accumulated, the CLV (Closing Location Value) starts to rise. When the CLV starts rising, the price starts to close in the higher range relative to the period, which is 14 days in my analysis.
And, when the price starts to close upward, it starts to narrow the Average True Range (ATR), which in turn starts changing the momentum of the current trend, whichever the direction of that trend is.
One play comes to mind is to buy the stock once it’s bottomed, and then sell the call option. I might consider that as a documented trade on this Journal once I have more time to work out the numbers.
nlightn- Excellent question. This is the kinda question that puts all of us in the learning mode.
From my study of “the language of the market”, it might’ve been a little late in the game of shorting the Citigroup, perhaps by about a month. This chart that I prepared for you should be quite self-explanatory. And, of course, from a contrarian point of view, we’d want to stay away when everyone’s on the same side. In fact, we may have to go to “the other side” – a hedge play on the long side. I’ll come back to that.
One additional footnote on CMF (Chaikin Money Flow)… And this is for my iHub buddy billkat as he had asked me about the money flow before. It’s a derivative of the Accumulation/Distribution indicator. It’s a ratio of the total Accumulation/Distribution to the total Volume. Thus, CMF starts to move up when the stock’s being accumulated. And, when the stock’s being accumulated, the CLV (Closing Location Value) starts to rise. When the CLV starts rising, the price starts to close in the higher range relative to the period, which is 14 days in my analysis.
And, when the price starts to close upward, it starts to narrow the Average True Range (ATR), which in turn starts changing the momentum of the current trend, whichever the direction of that trend is.
One play comes to mind is to buy the stock once it’s bottomed, and then sell the call option. I might consider that as a documented trade on this Journal once I have more time to work out the numbers.
David
#board-3693
Join the InvestorsHub Community
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
