In this edition of Charting Stocks For Dummies I will be breaking down 3 phases of a stock I recently recommended. This example will also show why it is in your favor to continue watching the same stocks.
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The particular move we will be looking at here is of JA Solar (JASO), a favorite of this website. You can see my initial analysis of this chart here. Within a week the stock has made a 34% move higher, and could go further.
The initial analysis was fairly simple: There seemed to be support around the 200-day moving average and both relative strength and MACD were looking to turn higher.
Given the previous high of $6.75. The chart alone shows you the massive amount of potential upside left in this stock.
I also want to point out that the most recent move in this stock was a move back above the 200-day moving average with its largest volume since dipping below. A good sign of trend reversal.
Rather than making anymore analysis, this chart further elaborates why the 200-day moving average for this stock in particular is so strong. Within the last year alone, this average has held strong 6 times. So with the recent confirmation of the move higher, it was safe to say the stock had some room to run.
Now I have been trading this stock for the last 9 months, and, like many of the stocks I trade, I have been following and playing with them for so long, so I know their tendencies. This is was helped me catch this particular move in JASO.
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Certainly this method isn’t the most advanced technique, but it’s easy and gets the job done.
In my experience stocks like to move in groups of three. Very rarely have I ever seen 4 or more consecutive large volume days; nonetheless, we now have another distinct trading levels. Should JASO stay above the 62% retracement, then the stock remains a buy.
So there you have it. To learn more technical analysis skills in detail, sign up for Chart Pattern Manifest.