Solid Weekly Uptrends

Jul 23, 2007: 11:34 PM CST

I tend to get caught up on the daily charts and play for smaller targets and this is a bane of mine and – I suspect – many short-term traders as well.  When you position yourself on daily charts for swing candidates, you may play for $5 or $10 per swing with respective stops of $3 or $5 per position.

Realize that your parameters and chart analysis can be very similar for the weekly charts – however – a major difference is that your price targets (and stops) increase immensely.  Now, you may play for $20 to $30 (or more) per “swing” position with stops being upwards of $10 away from entry.

Give the following charts consideration and examine only the structure of the uptrend and realize how the daily charts can throw you off of the powerful move underway in the stock price.  Remember, in a strongly trending environment, it is best to use moving averages over oscillating indicators, which is what I have done on the charts:

(charts are randomly selected and filtered for visual uptrends for educational purposes)

Apple – AAPL is exhibiting a ‘monster’ uptrend and ‘nosebleed’ recent highs.  The 20 period moving average has so far supported any pullbacks.

aapl-w.png

Atheros – ATHR – is showing a steady ‘wave’ pattern with a very strong impulse beginning in 2006 with a corresponding corrective wave down (which looked absolutely horrible on the daily charts at the time – it was a 50% correction) and then we are experiencing a steady (smooth) wave up where the 20 period moving average has predictably held price action:

athr-w.png

Holly Corporation – HOC: I really can’t add much in words – the chart speaks for itself.  Ever since testing $40, the price has moved in an extremely steady uptrend (this doesn’t look that pretty on the daily charts, though)

hoc-w.png

Exxon Mobile Corporation – XOM: I have followed Exxon for a few years now and have traded profitable positions in and out of it (including options positions).  As expected, price follows that of oil prices, which have also been on a steady uptrend over the last three years. Exxon’s weekly uptrend isn’t as attractive or steady as others I’ve  seen, but price has rallied upwards following brief corrections, and now price is at all-time highs, and has only endured two down weeks since May 2006  as price climbed from $70 to $93.

xom-w.png

Stay tuned as I highlight more weekly uptrends and stocks ‘on a roll’ that you can study.  Remember – as these charts show – rule one of the Guiding Market Principles is that “Trends have greater odds of continuation than of reversal” so it is best to build trend entry strategies to take advantage of potential movement.

1 Comment

One Response to “Solid Weekly Uptrends”

  1. gary Says:

    I always look at the weekly charts before I ever bother with a daily chart. The weeklies tell you whats really going on. Excellent post.