Once you understand price action, markets open to you

Trading concepts can be applied across many markets

Question: Can you spot any familiar price action/ chart patterns in these two charts?

INTC weekly chart

INTC weekly chart

AVGO weekly chart

AVGO weekly chart

 

Recurring chart patterns with high probability outcomes

First chart:  Intel Corporation (INTC)

  1. Head and shoulders pattern with right shoulder predicted by equidistant channel.
  2. These concepts of A) potential bearish reversal and B) equidistant channel were previously discussed here and here.
  3. Head and shoulders have near-perfect symmetries that are easy to detect.
  4. Patterns on weekly charts are considered significant and would be keenly followed by big players.
  5. The pattern is confirmed when ‘neckline’ is broken.

 

Second chart: Avago Technologies (AVGO)

  1. This stock was discussed during BP class.
  2. AVGO is a home grown tech company.
  3. Stock price consolidated for 2 years before breaking out of $40 high.
  4. Price is now >3x higher at 142 a mere 2 years later.
  5. We covered the concept of consolidation – breakout in this post.

 

Challenge to individual traders

Step #1 of your mission is to master a set of skills namely recognising price action, understanding market psychology, evaluating risk – reward and knowing when to commit to  action.

Step #2 of your mission – extend your tentacles EVERYWHERE!

Achievement? Acquiring an ‘ATM card’ that has withdrawal limit capped only by your imagination, determination and daring. The rest is up to you.

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Soh Tiong Hum is Director of TerraSeeds Market Technician Pte Ltd. TerraSeeds is a trading educator in Singapore since 2005. Soh Tiong Hum is a member and regular speaker at Technical Analysts Society Singapore events and has a bi-monthly lunch time event at IG Singapore on forex and stock markets. He is an avid blogger on technical analysis topics; his Twitter account @sohtionghum was ranked #23 out of The Top 70 Twitter Accounts To Follow In 2015 by MahiFX. Come find Tiong Hum on Google+
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