Three Educational Charts

Here are three charts that show past opportunities and some possibilities for the futures. All charts are for educational purposes and have minimal annotation.

US Dollar Index – Weekly

Comments:

• Downtrending and may make new price lows
• Potential support at the 2005 low – if broken, few levels of support below
• Head and Shoulders pattern led to dramatic price decline
• Note annotated momentum divergences which led to small targets
• All Three Moving Averages are clearly sloping lower and aligned bearishly

Net Flix – NFLX – Weekly

• “Squeeze Play” led to possibility for playing for a large target – note momentum divergence building during squeeze
• Consolidation currently taking place. Watch for break of triangle formation. May be months ahead.
• Notice the pure swing action in the chart

Sears Holding – SHLD

• Notice the “Squeeze Play” that led to a large target
• Note the “Impulse Buy” trade that occurred after price expansion and New Momentum High
• Note the “Three Swings” or “Three Pushes” that occurred after volatility/price expansion and the trades at the moving average pullbacks
• Notice the momentum divergence forming as the “Three Push” pattern completes itself
• Very bullish action, as confirmed by the alignment and slope of the moving averages

(Disclosure – I have no current positions in the highlighted stocks, but have traded positions in SHLD)