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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

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There is the old saying that “Time in the market beats timing the market” The chart below from Dr. Wish’s @WishingWealth presentation at the @TraderLion_ conference shows that to be false.

Full presentation: https://t.co/o2f21GBXci


The green line is unattainable realistically, however, missing volatile times during corrections yields better performance than buy and hold and we can aim for the green line.

Investors usually only show the gray and red results.

More

There are many strategies for investing/trading in the stock market operating within different timeframes and with different objectives.

That is of course what creates a market and opportunity. Timing the market may not be what works for you or what fits your goals/lifestyle.

However, everyone involved in the market is here to make money over time and corrections can cause huge drawdowns in the high alpha names negating incredible performance during strong market uptrends.
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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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“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”

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4 Simple Steps to Avoid Downtrends 📉 (a thread)

🧵


1. Know the difference between an uptrend & a downtrend 📈📉

At TraderLion, we identify an uptrend as stocks/markets that trade ABOVE a RISING 21DSMA and 50DSMA.

A downtrend occurs when stocks/markets trade BELOW a downsloping 21DSMA/50DSMA.

Let's look at an example 👇

$QQQ from 2020 shows what an uptrend, downtrend, and even chop period looks like.


2. Know when it is really time to make money on the long side.

Swing Traders: when markets/stocks are above the rising 21D
Position Traders: when market/stocks are above the rising 50D

We can take this one step further by understanding what a Power Trend is 💪

The trend is really your friend when we have a Power Trend in the general indexes. A concept coined by the @IBDinvestors team, we must have the following:

✅ Low > 21ema for past 10 sessions
✅ 21EMA > 50SMA for at least 5 sessions
✅ 50SMA slope is positive
✅ Market closes up
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Other than books, video is a fantastic medium for traders to learn about different methodologies & techniques

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