Looks like it is in Phase D or E, mark-up. A $0.50-box by 3-box reversal P&F gives a target of $43 to $49.50. Does that agree with your methods?
The 29 level was the most active price by volume after it gapped down in 3/13/2013 and ranged until 11/4/2016 ...... but I'm honestly somewhat uncertain with this one. Appreciate the second opinion @Onepoint272 !
Looking at the volumes on the P&F chart, the CO/CM stepped into VRX in a big way on that red column down from 16.50 to 8.50 (capitulation). Thence throughout the range the volume declined. It sure has the look of accumulation and the cause/count says they will near triple their money. So according to your work, $29 will likely present some resistance but for sure want to trade it on the long side. I have a sort of aversion for pharma companies, maybe because they are so news driven.
Beyond the fact that I like the chart setup (it has classic "panic" that needs to be back-filled) - there's also the fact that CEO Joe Poppa (still relatively new to the company) took the position and pledged to not be awarded a $250 million bonus until the stock made its way back $60.
I'd be watching for supply at the overbought edge of the channel and/or withdrawing of interest/demand. the break of the 24.00 level was on decent volume and the new high is promising. I at least expect some absorption in this 'zone' and would not want to go long unless there are clear signs of demand on some sort of test or backup. Curious what the vets have to say (I didn't check P&F charts) Edit: The last two posts only showed up after i posted my reply, the P&F issue got covered though
Yes, good catch. I was looking at that channel on the vertical chart too. My supply line is a little higher/steeper though. On the daily I also saw a price where large supply came in back in 2016 at 28.85, coinciding with Rocks $29. Weekly.
Nice ! Thanks Onepoint272. I think the steepness of our channels is the same by the way. If i look at your demand edge i see we drew it the same. I drew the overbought line lower. I tend to do this when i see multiple testing that nicely follows the angle of incline as you can see on the daily chart i posted. I sometimes see Wyckoffians drawing trendlines at the highs of upthrust bars and i also see others drawing them lower disregarding the actual upthrust and thus counting the upthrust as being in overbought territory. In ranges i see they are often drawn both. I'm interested in your opinion about this.
It appears you are aware of the Wyckoff way to draw trend channels (using 3 points) and the necessity of keeping the support and demand lines parallel to the overbot and oversold lines, and I assume you know the difference between normal and reverse trend channels. Generally I don't count on them for identifying exact turn points as horizontal S&R is more important for that and there is context to consider. Of course it is encouraging when trend lines and horizontal S/R coincide. In short, I use the extreme prices because Wyckoff taught it that way. Wyckoff also judged the penetration or inability to reach the lines as evidence of a change in behavior, that is to judge the condition of the trend. As you may know, he strongly warned about using trendlines in a mechanical fashion. Here's what he had to say about that: "Never undertake to draw conclusive deductions from trend lines alone. Let other people employ them as mechanical panaceas if they wish. YOU are studying the correct principles of market forecasting because you do not want to be in that "sucker" class of calculating machine forecasters." I think it is obvious you've studied these things, as you use the correct nomenclature, e.g., "overbought line"., etc. For others' benefit and my own need for constant reminding, here are some Wyckoff definitions: A Support Line is that line which identifies the angle of advance of a bull swing by passing through two successive points of support (the low points of two successive reactions). A Supply Line is that line which identifies the angle of decline of a bear swing by passing through two successive points of resistance (top of rallies). An Oversold Position Line is that line which is drawn parallel to a supply line and passes through the first point of support (reaction low) which intervenes between two successive rally tops in a down trend. An Overbought Position Line is that line which is drawn parallel to a support line and passes through the first point of resistance (rally top) intervening between two successive points of support in an up trend. But to answer your question more fully as to why I use the extreme prices, this is me talking: I think its important to recognize that the extreme prices, the swing points, are the prices where nobody in the whole world was willing to buy even one more share at the asking price or in the case of a downtrend, the price where absolutely nobody was willing to sell a single share at the bid price. To me that seems like a huge psychological point of interest. It's like the very last atom on the tip of a pin. But ultimately, it is just a standard, a ruler, a way to gage price reaction, does it penetrate? close above? fall short? All of course in the context of other evidence.
@Ingmar @Onepoint272 Looks like the supply line for VRX was around today's high at $27.70. It swiftly rejected that thing.
Adding DBX to my watchlist. Mark up from the mid 32 creek? Or is toay not significant enough volume? Btw in my opinion the bottom is in on DISH after that sell climax in May.
I've been tracking it since it IPO'd. Yesterday it closed above an important level from a volume profile perspective (unrelated to Wyckoff). But ya, 3 months isn't a ton of cause there, but I knew it had some juice - just wasn't expecting a 20% pop. I'm assuming since it's such a fresh chart it set off a lot of trading alerts for technical traders and algos. There was definitely no news backing the move - but then again it could come tomorrow as volume often precedes it. By the time I took notice it was up 5% and I just couldn't chase it given that I had no ample targets (still learning PnF for that when I'm not trading mean reversions).
@Onepoint272 hey bud. Quick question. Remind me again why sometimes you use 1.5 and sometimes you use 0.5 in your PnF measurements?
Your trading is related to market auction theory right?... Think i read that in one of your posts somewhere here Volume profile unrelated to wyckoff... Maybe... But maybe it should be I don't recall seeing any of the big wyckoff guys use it.. Roman or Bruce or Weis, the ones i follow...... But, i find it useful, or at least i think i do, judging accumulation from distribution by observing where the high volume node falls in the range..... ie if CO is net buying, volume should dominate the lower end of the range, and vice versa Makes sense to me at least
Box size should be relative to share price.... Onepoint can be more specific with that... I do mine somthin like this: < $10 = 0.25 box $10 - $20 = 0.50 box $20 - $100 = 1.00 box
It changed the game for me and really opened my eyes up to how the operators or market makers structure markets. It also cleaned up my charts. I typically like to contrast it with all my previous Wyckoff/VSA knowledge. Then of course I've added in my own observations. I find that it's amazing for mean reversion trades, but so far the PnF stuff I see in here is the better method for determining targets when price has moved outside of the volume profile. Still have a lot to learn when it comes to PnF though.
Awesome. Thx. One more Q - how do you decide the box count for when you draw your base in the accumulation/distribution phases?
For the box size I usually change the setting from "traditional" to "Average True Range" for 20 periods to see what that gives for a box size. Then I usually adjust it down to a round number where I'm getting good definition. Jrich's examples look about the same as what I generally use. I've found that the price objective is not overly sensitive to the box size. The horizontal count is generally from the LPS back to the SC for accumulation or to the BC for re-accumulation. Usually those are identified on the vertical (bar) chart first and the corresponding points found on the horizontal (P&F) chart. Sometimes though it is obvious on the P&F chart and experience helps too.
Basic Point and Figure price objectives: EDIT: It appears for the example given in this video he is using a $1-box by a 1-box-reversal. I more often use a 3-box-reversal, which means that a new column cannot be started until the price reverses by 3 boxes. If the horizontal count is 10 boxes for $1-box by 3-box reversal, then the expected move will be 10 x $1 x 3 = $30.
