0R19 trade ideas
ELLIOTT WAVE BDXWe could hypothesize that the correction to the previous propulsive wave has been realized with a corrective wave of the "flat" type, which seems to have expressed its end resting on the support at 210 $. Signal of probable beginning of the propulsive wave given by the value of the RSI dropped to 20.
Late Trade Idea --- RSI & MACD ---This idea came across my scanner last week. I never got into the trade... And probably wont as I just wont get a entry with much tolerance to downside.
Bullish above RSI 69.1 and RSI Uniformity line. use Uniformity line as a sell signal
Personal note: Idea from "alternative 2" scan
Worst performing position of 09/13/2017Every strong close of today (09/14) below the minimum of yesterday (09/13) will force us to close this position
BDX -- Testing breakout of C&HHA chart shows breakout
Standard candle chart shows backtest of breakout line today
Buy on up confirmation of breakout
Becton Dickinson - BDX - Monthly - Deteriorating FundamentalsAfter publishing a chart on KSS for its favorable fundamental situation with the stock oversold and expectations low, I decided to find another stock where the valuation looked high with it technically overbought and running into a wall of overhead resistance.
I found this condition in BDX, a manufacturer of medical devices, many of them disposable.
Notice how the Return on Equity (ROE) has dropped to its lowest level in 15 years and the free cash flow generation is also the lowest since 2003. Notice that the stock has more than QUADRUPLED from 2003, but free cash flow is flat.
140 is a "breakeven" level where anyone who has purchased BDX shares in the last 10 months is "underwater" or losing money. 140 is the price where sellers may just reconsider their purchases given that the fundamentals have deteriorated over the past year from ROE over 20% to ROE near 10%.
Technically and fundamentally this is a short candidate: Risk to 145 (only 3% up) and downside to $110-$120 or lower (down 15%-20%). If BDX goes above 145, then I would re-consider holding short, but it if drops back under $140, then I would consider the shares to be safe to be sold short.
Tim
October 27, 2015 2:18PM EST 140.47 +0.57 last
The Anatomy of Trading Breakouts> BDX ExampleHi Fellow Risk Takers,
I did a Webinar, hosted by Maria from Exante, on The Anatomy of Trading Breakouts ( Link in Reference Section ).
We discussed about the Characteristics of Price Breakouts, followed by building a Trading Plan, using US Equity BDX as an example.
This is the BDX Example in writing.
For each Price Chart, I'd go through 5 Steps, to judge the breakout potential.
1) Identify the Overall Trend
The first thing is always to identify the trend of the market.
For Reversal Breakouts we should have Sideways Trend and for Continuation Breakouts, the trend should support the potential breakout direction.
In BDX it is clear that the overall trend is Bullish.
2) Look For a Long Period of Price Build Up
A breakout needs a long period of Build Up, usually in the form of a Chart Pattern.
In BDX we observed a Rectangle Pattern formed.
3) Look For a Clear Price Level, Whereby We Can Expect Stop Loss Orders Resting Beyond that Level
Breakout trading is in a sense, a form of "Stop Loss hunting".
For BDX, we noted resistance at 148.00 .
However, I also note a minor spike to 149.60 at 2015-03-03.
To be safe, I will set 149.60 as the breakout level.
4) Is There Any Nearby Support or Resistance Levels That May Halt The Breakout Move?
Any nearby S/R levels may become obstacles and slow the breakout move.
So I will look for such obstacles, the lesser the better, none is the best.
For BDX, it is trading at historical highs, so we have a "Best Case Scenario".
5) Is There Any Other Technical Studies that Support a Breakout Move?
Lastly, I will look for any other supporting evidence that will strengthen the case for a breakout.
For BDX, the price action from 2015-06-16 to 2015-07-28 looks like a potential Elliott 5-wave pattern.
Projection
From these 5 Steps we established the following:
a) Trend is Bullish
b) There is a Continuation Bullish Pattern
c) There's likely an accumulation of Stop Loss orders above 149.60
d) There is no historical resistance levels impeding a bullish breakout
e) We have a likely Elliott 5 wave pattern in the making.
Therefore weighing the balance of probability, I can deduce that there is a strong case for a Bullish Continuation Breakout.
In fact the breakout has already happened, shortly after the webinar.
Now the Execution Part
Entry Conditions
When both X) and Y) are TRUE :
X) Price does a daily close above 149.60 (already TRUE on 2015-07-28)
Y) Entry price is not cheaper than 149.60
Stop Loss
Below 145.50 , determined by price action.
Shifting of Stop Loss when slightly Profitable
We can consider shifting the stop loss to below the breakout level ( 149.60 ), if price breaks slightly higher, say 153.00
This is to protect Capital from the risk of loss, in case of a false breakout.
Time Limit
All long positions should be closed by 2015-Sep-18
Besides a Stop Level based on price, it is prudent to set a Stop based on time, especially for trading breakouts.
If price is unable to reach the price targets within a limited time, it is no longer a breakout move and all positions should be closed.
Taking Profit
Profit Level 1 at 160.00
This is measured from the height of the Rectangle Consolidation and projected from the breakout level.
We can consider closing 50% position at this level.
Profit Level 2 at 170.00
This is measured from the breakout move, occurred before 2) , and projected from the base of the Rectangle Pattern.
All long positions should be closed at this level.
So there you have it, the explanation of how I scan for breakouts and craft a trading plan.
Reference:
The Anatomy of Breakout Trading Webinar> www.youtube.com (BDX example at 43:15)
