Here’s An Easy Way Of Spotting Setups In Alternate Time Frames
I’ve spoken in the past about the
importance of looking at stocks in multiple time frames, and
recognizing the technical patterns that may exist in longer or shorter setups
than you might normally trade. The recent market action has provided a large
number of setups and breakouts that could have been played for either long or
short-term trades.
For those who are not used to spotting setups in alternate time frames, the
easiest way to begin is to scan the reports of people that deal in alternate
time frames. Then, when you spot a stock you are active in, simply try and
understand the setup they are looking at. Many times I will notice that
different columnists are mentioning the same stocks on TradingMarkets for
completely different reasons.
For example, just last week, EBAY, ADTN, ERES, and USAI made it into both Tim
Truebenbach’s Intermediate-Term column and Chris Tyler’s Nightly Daytrader’s
Report. It’s no coincidence these stocks all had sizable moves recently as well.
This type of analysis can help intermediate-term traders to spot alternate entry
points or potential reversal zones in stocks that they are either looking to
scale into or out of. It can also help short-term traders to identify which of
their holdings may be worth keeping a piece of for a little longer, in the hopes
of catching a bigger move.
After doing this for a short while, you’ll begin to spot many of these patterns
yourself, even before you read the reports. Once you can do that, you can begin
to make smarter decisions on how to play in your stocks.
From a market standpoint, it still looks like the easiest place to make money is
on the long side. Breakouts are relatively abundant, international markets are
also on the rise, and leading stocks are acting well. One difficulty for the
market is that each time we break a level of resistance and move higher, there
seems to be another one not far away. This is the result of three years of
selling. What I believe this will mean is that even if the market is able to
continue to trend higher, it will be accomplished with a lot of backing and
filling. You might say a Bill Murray, “What About Bob?†market. “Baby stepping
to the March highs. Baby stepping to the December highs. Baby stepping to the
August highs.â€Â And so on.
Best of luck with your trading,
Rob Hanna