Symmetry Is Serious Business
So what do
I mean when I talk about symmetry? Quite simply, symmetry is similarity. That
similarity can be measured on the price axis of the market or the time axis.
And it can be used as a trading tool on any time frame chart. Below is a 60-minute chart of Cisco Systems
(
CSCO |
Quote |
Chart |
News |
PowerRating). When I say this stock has been in
a very symmetrical down trend, I am looking at the sell offs and the countertrend
rallies. Starting June 7 through yesterday, here is the price action:
Up 1.1 points,
down 1.8 points, up 1.1 points, down 2.0 points
So, coming
into today’s session CSCO gaps down and guess where it stops? Low of 12.39 or
down 1.99 points. Buyers come into the market and push CSCO up over $1.00 from
that SYMMETRY low.
Bottom line:
When a stock is rallying, take a peek at the previous rallies (swing low to
high) and how many days they lasted and/or the number of points the stock rallied.
When a stock is in a decline (swing high to low) look at how long that decline
lasted and/or how many points the stock decline. Then look for the current price
action to possibly mirror those previous swings. More times than not, this analysis
will provide at least short-term pivot points in the stock you’re following.
Cheers to Symmetry!
Â
Â