itrademan
70 posts
msg #43496
- Ignore itrademan |
5/5/2006 11:31:09 AM
Stockfetchers ready to help,
I am trying to find low volatile stock with expected breakout in couple of Months.
I hear that triangle and pennant can help to identify breakout.
About volatility do we have any reliable indicator to match implied volatility (I guess this is more an Option related term).
Have anybody tried this?
What was the success rate as the breakout will be difficult to analyze in BackTesting?
Any new ideas for low volatility & breakouts are welcome too.
Thanks
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heyen
124 posts
msg #43505
- Ignore heyen |
5/5/2006 3:54:52 PM
Like this?
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itrademan
70 posts
msg #43507
- Ignore itrademan |
5/5/2006 4:32:18 PM
The Bollinger band getting narow is good criteria for both bearkout and low volatility.
I add your setting to the filter I am looking for.
Are there any good filters to use for Option straddle or Strangle.
Thanks
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EWZuber
1,373 posts
msg #43558
- Ignore EWZuber |
5/8/2006 4:59:35 PM
Watch for the Monthly Chart to reach an oversold condition with the stochastic(5,3,3) fast %K and slow %D lines converging. Ideally you would like to see some kind of MA support at that level and/or an improvement in EPS for best results.
If there is no Monthly MA below your stock( 10, 15, 25 or 50 MA) then it becomes more important that fundamentals are improving. Because that would mean that you are trying to catch a stock that has been falling for a very long time and there needs to be something to attract buyers to try and catch the falling knife.
It also helps to have the Quarterly chart oversold also, creates more synergy.
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EWZuber
1,373 posts
msg #43570
- Ignore EWZuber |
5/9/2006 4:49:04 AM
Here's an example. Just arbitrarily picked DLTR. The first is a 5 year Monthly Chart. Here there is a supporting trendline that provided very good guidance to indicate the area it would likely bounce from.
The Monthly (and Quarterly*unshown) chart both became oversold near this support and the Monthly Chart broke trendline resistance in November and the stochastic fast line crossed above the slow line at the same time for a confirmation of a new accumulation phase.
[URL=http://server3.pictiger.com/img/284188/other/dltr-monthly-chart.php][IMG]http://images3.pictiger.com/thumbs/b9/6be0429c4cabed9020d8fc0cafff1fb9.th.jpg[/IMG][/URL]
[URL=http://server3.pictiger.com/img/284189/other/dltr-weekly-chart.php][IMG]http://images3.pictiger.com/thumbs/1b/de6fbcbbd87a959274e555eadfd0091b.th.jpg[/IMG][/URL]
[URL=http://server3.pictiger.com/img/284190/other/dltr-daily-chart.php][IMG]http://images3.pictiger.com/thumbs/e8/dc05cc42de6eb074b81594d05feba3e8.th.jpg[/IMG][/URL]
[URL=http://www.pictiger.com]Free Image Host - PicTiger[/URL]
The Weekly Chart is much the same. Notice the timing (phase relationship) of the stochastic waves from one time period to another. Thery aren't always this close in sync. Matter of fact they usually are more out of phase with eachother.
Daily Chart shows an even closer detail of the entry point. Showing the entry at about $21.25.
If I could bring up an Hourly chart the detail would be more well defined, even more with the 5 minute chart. The exact moment could be found where the TLR was violated and the entry point was created, IMO.
This is based on the Convergent Stochastic Theory
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EWZuber
1,373 posts
msg #43572
- Ignore EWZuber |
5/9/2006 4:54:56 AM
When copy/pasting the URL delete
"URL=" at the beginning of the address
and
"[/IMG][/URL]" at the end
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itrademan
70 posts
msg #43574
- Ignore itrademan |
5/9/2006 10:49:39 AM
EWZuber,
Thanks for providing inputs.
I have just saw your response and will study in detail. I read your Convergent theory in other thread. I was not able to master it fully. Your suggestion seems similar to using it here.
My main aim is to try buying couple of months expiring options when they have low volatility with a straddle/strangle and cash in when there is a breakout.
I know the main event for options straddle/strangle will be during the earnings period. But I too notice that the big moving stocks slowdown a bit and that will help to buy an option with low volatility. As we know after a low volatility there is going to be a high volatile periods with good swing. That’s where I want to cash in.
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itrademan
70 posts
msg #43575
- Ignore itrademan |
5/9/2006 11:00:14 AM
EWZuber,
Awesome, I got some good brush up on how to use TA with multiple timeframes and use the stochastic & MA with it.
This will help me to find the swings within few months.
Thanks
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EWZuber
1,373 posts
msg #43577
- Ignore EWZuber |
5/9/2006 1:21:29 PM
itrademan
Yes finding some kind of support on the Monthly Chart is important if the stock is in a distribution phase in that time frame.
Lately many stocks have been making consolidation patterns but Distribution hasn't exceeded the Weekly Chart time frame in the quality stocks. Consequently I have been looking for MA support on Weekly Charts and a convergence of the fast and slow lines on Weekly and Daily Charts to find cycle bottoms.
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