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5 Ways Weekly Charts can help your Trading & Investing

📈📉 (Thread)

 Weekly charts are a powerful timeframe, and regardless of your style, they can help you gain perspective on a particular setup and identify its potential
Using higher timeframes slows the action down and allows you to calmly analyze price and volume.

This will lead to better decision making.
For investors learning to analyze weekly charts and their trends can only complement your fundamental analysis.

For traders they are the "prevailing wind" and trading with this weekly trend will increase probabilities and help you remember to focus on larger patterns
1⃣ Weekly Charts show the True Trend of a Stock

Weekly charts eliminate a lot of the back and forth that occurs intraday and on daily charts. What is left is often a clear picture of the trend of a stock.

⬆️ Trending Up
↔️ Basing
⬇️ Trending Down
To identify this trend you are going to want to plot a 10 week SMA and a 30 week SMA on your charts

During a strong uptrend you will be amazed at how well the 10 week line acts as a guardrail for a stock's move

$ZM increased 450% in 10 months, undercutting the 10 week only once
This is not simply a 2020 occurrence. Most stocks which make significant moves > 100% show respect for the 10 week line.

This is because it is often a spot where institutions build/add to positions on pullbacks.

$DOCN advanced 150% in 6 months holding the 10 week sma
The same is true if you look back at the best performing stocks in history. The 10 week sma is consistently an area of support.

Here's is $HD's powerful move in 1981

The red line is the 10 week SMA.
The 30 week moving average is just as useful for investors and traders for identifying the stage of the stock

Stage 1 - Basing
Stage 2 - Advance
Stage 3 - Consolidation
Stage 4 - Distribution

The big money in made during S2 Uptrends and the big money is lost in S4 Declines
S1 - Price chops back & forth around a declining to flat 30 week MA

S2 - Starts with a big volume breakout from a base, Price starts trending above a rising 30 week MA

S3 - Price chops around a flattening 30 week ma

S4 - Price starts trending below a declining 30 week MA
Stage Analysis, developed by Stan Weinstein, shows the long term trend of any stock.

Both investors and traders should focus on stocks beginning or in Stage 2 Uptrends.

My Interview with Stan:

🔗https://t.co/G5jsyL5BMo
2⃣ Weekly Charts reveal the footprints of Institutions.

Institutions can't hide when they begin and continue accumulating positions.

Look for.

✅ Huge Volume Spikes
✅ Tight Weekly Closes
✅ Increasing average weekly volume
Look at the chart of $TSLA since 2019. Notice how breakouts from bases are accompanied by volume well above the 10 week average, & within bases volume dries up.

Look at significant volume weeks and determine based on context and CR if a stock is being accumulated or distributed
$SNAP is a great example of tight closes within a base suggesting institutions drew a line in the sand and were accumulating shares.

Also look for this after a breakout to see if institutions are still building positions
$FUTU is an example of weekly volume increasing during a move. As it does this the stock becomes more liquid and larger institutions can get involved.
3⃣ Focusing on Weekly charts reminds us that the biggest moves come from larger patterns.

100% + moves begin with a long basing period and a strong breakout.

Focus on 👇

✅ Recent IPOs after their first big base
✅ Mature names after they have consolidated
$NVDA has had multiple moves out of long basing patterns. This allows shares to fully transfer from short term players to longer term institutions
Recent IPOs often start long term moves out of their first primary base.

Read "The Lifecycle Trade" for more info

📘https://t.co/PuofeP4Mkc

@EBoboch
@KGD_Investor
@EricKrull1
@Top_Dog_102
4⃣ Weekly Charts Remove the Noise. Limit Decisions

As mentioned previously, weekly charts remove intraday and daily chop. The stock can move a lot throughout the week but it is the institutions who control where it closes.
The weekly action and trend supersedes the intraday and daily movements of a stock.

Always make sure you are stacking probabilities and trading with the weekly trend.
For investors, Weekly Charts are a great way to use technical analysis and time trades since there are a lot less signals to work with.

Position and even swing traders should also consider buying on a daily chart but then switching over to a weekly once the trend is established
This is especially helpful after a significant correction when trends can last a lot longer than we think and daily noise can scare us out.

Here's an example with $PTON buying on the daily and then managing the position on a weekly.

When the weekly trend changes PAY ATTENTION.
5⃣ Identify Key Levels and Pivots

Weekly chart highs and closes are excellent pivots to use on a daily chart for shorter term traders.
Inside weeks especially provide clear pivots for swing traders. These are volatility contractions on a lower timeframe.
Trading off weekly levels is a great way to improve the probability of a trade working since the weekly players are involved as well not just the daily and intraday traders.
I hope you all found this thread helpful!

If you did please like and retweet the first tweet (linked below) 👇🔁

Also tag anyone else who you think would find it interesting. Take care!

https://t.co/6G431IkBDQ
Also if you enjoy my threads make sure you are following my weekly newsletter Trading Engineered

https://t.co/TvGS94qkPP

More from Richard Moglen 📽️🦁🚢

Richard Moglen \U0001f4fd\ufe0f\U0001f6a2
Richard Moglen 📽️🚢...
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As Traders, Technical Analysis allows us to Judge Potential, Identify Accumulation, and Manage Risk.

It allows us to see through the noise and interpret price action.

Here is How To Read a Stock Chart For Beginners (Thread)

Let's start with the basics.

When you first pull up a stock chart you will see Price and Volume plotted versus time.


Each price bar represents one period of whatever timeframe you are on

Some people like candlesticks, I personally think Open/High/Low/Close (OHLC) Bars are more intuitive

For each bar/candle, the four important data points of each period are represented:

High
Low
Open
Close.


For each bar, we want to be able to determine whether buyers or sellers are in control and how much conviction they have.

To do this we use our tools: Price and Volume

Thing about turning a price Bar 90 degrees counter clockwise so the high is now on the left and the low is now on the right.

Then picture a game of tug of war with participants representing buying pressure on the left and selling pressure on the right.
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“Sudden rises in price and volume, out of the ordinary relative strength, and movement against the general market trend are all giveaway signals which reveal the presence of a stock about to take off”

Nicolas Darvas
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What is Relative Strength (RS) and how to identify it (Thread)

Focusing on stocks exhibiting strong Relative Strength is one of the keys to achieving superior returns. This is one of the core ideas of #CANSLIM

In one sentence showing RS means outperforming other stocks both during market uptrends and downtrends.

In this thread we will cover examples, how to spot it, and how to use it to make sure you are in the top stocks.

If you want to outperform the indexes, logic says you have to be invested in stocks doing the same.

First Some Basic Terminology:

RS Rating: @IBDinvestors Proprietary measure of RS scored 1-99. Stocks with an RS rating of 80 have outperformed 80% of stocks over the past year.

RS Line: The Line plotted by dividing each day’s stock price/ price of the SPX.


The value of the RS line itself does not mean anything, but the trend of this line is very important.

-Note RSI (Relative strength index) is something completely unrelated to the concept of this thread.
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What is a True Market Leader / TML (Thread)

(And how to find them)

In one sentence a TML is an institutional quality stock in a leading industry group with superior fundamentals and technicals

These are monster stocks which over the course of weeks and months increase +100% to +5,000%

TMLs are popular with traders/investors whose methodology is based on the CANSLIM system developed by William O'Neil.

He called them Model Book Stocks. Huge winners worth studying to identify common characteristics that they all share

O'Neil studied over 1000 model book stocks going back to the 1880s.

Many are shown and discussed in these must read books

How To Make Money in Stocks, O"Neil
https://t.co/S2sShZedUm

Monster Stocks, John Boik @monsterstocks1

A Few Examples courtesy of @SystematiCK_

Pic N Save
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Richard Moglen \U0001f4fd\ufe0f\U0001f981\U0001f6a2
Richard Moglen 📽️🦁🚢...
@RichardMoglen
An Introduction to Price and Volume Action (thread)

An understanding of price and volume action is essential for judging supply and demand characteristics. This allows you to determine whether a stock is under accumulation or distribution and find proper buy and sell points

This thread is not about memorizing candlestick patterns, but instead understanding how supply and demand create patterns over and over again. The Stock Market is an auction, and the large buyers and sellers leave clues for us to find within price and volume.

Let’s start with one price bar. I personally use OHLC charts but feel free to use what makes sense to you, they each present the same information. A single bar can represent a minute, 15 minutes, a day, or a year. The higher the timeframe the more meaningful the price move.


I view each bar as a match of tug of war between the buyers and the sellers. Buying pressure tries to pull the stock price up while selling pressure tries to pull it down. The winner is reflected in the closing range.
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Impatience and instant success are built into our minds from the get-go. We want instant wins and instant rewards.

This has as much to do with our psychological build-up as it does with the society we live in.

In this thread, we will cover:

What to do if you are not trading well.
How to stop the drawdowns when no progress is being made.
How to have a systematic process that protects you from yourself.

So what is it that drives us?

We all want the market to reward us for our hard work, the effort, and time we put into it.

We want input to equal output.

However, there is no such thing as input = output in trading.

Trading is about consistency, persistence, and hard work without the certainty of any reward.
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Richard Moglen \U0001f4fd\ufe0f\U0001f981\U0001f6a2
Richard Moglen 📽️🦁🚢...
@RichardMoglen
What is a True Market Leader / TML (Thread)

(And how to find them)

In one sentence a TML is an institutional quality stock in a leading industry group with superior fundamentals and technicals

These are monster stocks which over the course of weeks and months increase +100% to +5,000%

TMLs are popular with traders/investors whose methodology is based on the CANSLIM system developed by William O'Neil.

He called them Model Book Stocks. Huge winners worth studying to identify common characteristics that they all share

O'Neil studied over 1000 model book stocks going back to the 1880s.

Many are shown and discussed in these must read books

How To Make Money in Stocks, O"Neil
https://t.co/S2sShZedUm

Monster Stocks, John Boik @monsterstocks1

A Few Examples courtesy of @SystematiCK_

Pic N Save
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@TraderLion_
How To Execute when Trading (Thread)

Trading is a matter of preparation, discipline and execution.

Execution is about reacting to what we see on the charts in accordance with what you have already planned out when the market is closed.

The reason we plan our actions beforehand is because our emotions are at a lower state and we are more objective at that point in time.

Many traders often have the same watchlists going into the week but when the opening bell rings and setups emerge, the traders who can execute have the best performance.

Trading execution begins with research and preparation.
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10 Essential Trading Principles (Thread)

⬇️

1️⃣ Trade Plan:

The first thing before a position is initiated is a clear plan must be in place detailing specific entry areas, their associated sell stops, and potential profit-taking zones.

Below are some factors to consider when crafting your trade plan:

✅ Individual Goals
✅ Personal Progress
✅ Current Market Environment
✅ The many fundamental and technical factors relevant to each individual stock, its sector, industry group, and its overall strength relative to the rest of its industry.

2️⃣ Risk Management:

This is the golden key to consistent success in the stock market. Yes, it is even more important than stock selection.

Bernard Baruch, a close friend of Livermore said even being right 3 or 4x out of 10 should yield a person a fortune if he cuts his losses.

3️⃣ Annual & Quarterly Earnings:

Look for companies with:

✅ Annual earnings that are positive and have been increasing YoY for at least 3 years.
✅ At least 25% QoQ earnings/sales growth for a minimum of 3 quarters.

These are early indicators a stock may be ready to explode.
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Richard Moglen \U0001f4fd\ufe0f\U0001f6a2
Richard Moglen 📽️🚢...
@RichardMoglen
As Traders, Technical Analysis allows us to Judge Potential, Identify Accumulation, and Manage Risk.

It allows us to see through the noise and interpret price action.

Here is How To Read a Stock Chart For Beginners (Thread)

Let's start with the basics.

When you first pull up a stock chart you will see Price and Volume plotted versus time.


Each price bar represents one period of whatever timeframe you are on

Some people like candlesticks, I personally think Open/High/Low/Close (OHLC) Bars are more intuitive

For each bar/candle, the four important data points of each period are represented:

High
Low
Open
Close.


For each bar, we want to be able to determine whether buyers or sellers are in control and how much conviction they have.

To do this we use our tools: Price and Volume

Thing about turning a price Bar 90 degrees counter clockwise so the high is now on the left and the low is now on the right.

Then picture a game of tug of war with participants representing buying pressure on the left and selling pressure on the right.
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