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Failing Forward - another journal of a Wyckoff student

Discussion in 'Trade Journals' started by Ingmar, May 19, 2018.

  1. Ingmar

    Ingmar Member

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    This week i saw people posting on social media that now is the time to buy NOKIA ($NOK)
    So i took a look at the chart.

    Looks like distribution to me. The reason for people wanting to buy is the last weekly candle which looks very bullish.
    The accompanying volume for that candle suggests supply present and the daily chart shows just that.

    What are your thoughts guys, long or short?
    cheers

    77A48D16-D13D-453A-B790-4AAE6B7044CF.png 6496E0D9-F451-4368-BAAA-DF079723EA68.png
     
    #21 Ingmar, Feb 9, 2020
    Last edited: Feb 9, 2020
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  2. Three Eyes

    Three Eyes 2018 Stockaholics Contest Winner

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    From a Wyckoff perspective, what would you have to see to convince you of buying?

    From my own quick (non-Wyckoffian) read, I'm highly suspect of this bounce. It wouldn't surprise me if NOK went to 4.75-ish (which is still a nice percentage change from it's flirting with 3.5 last November!), about where one might expect resistance.I could see buying the dips with an eye towards flipping the shares on a swing. On the whole, though, I'd like to see NOK establish a base in 3.75 to 4.75 range for at least a year or two before I get too excited.
     
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  3. Ingmar

    Ingmar Member

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    @Three Eyes

    From a Wyckoff perspective this could be two things. It could turn out to be a shake-out. A high volume temporary sell off below the trading range where long term trend following institutions see new value and opportunity to add to their existing long positions. This would mean a continuation of the range and we see a spring type action or last point of support before a markup/ new uptrend.
    Or it could be the end of distribution where the swing back towards previous support could be a test before a markdown. A Back Up (BU) in Wyckoff terms.
    An analogue for that would be the smaller range with the dotted edges i drew within the larger structure. In that case i wouldn't be looking to buy. We could see the exact same price action on a larger scale with the bigger range or some more testing before a drop in price.

    Normally, when bullish, a successful test on lower volume after a sell off like that could be a buy entry. A high spread candle with ease of movement (low effort - great result) , a bullish candle breaking the resistance & closing inside the range could be entry candles. Regular price action entries i guess.

    I believe we've been looking at distribution though and i don't feel comfortable buying here. This, because of my bias, but also because on the daily chart you see very high volume on those last two candles, even though the two of them managed to close above the most recent high, the spread, compared to the amount of volume, suggests quite some supply to me, so i'm expecting a (temporary) bearish reaction.
     
    #23 Ingmar, Feb 9, 2020
    Last edited: Feb 9, 2020
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  4. AverageJoesTrades

    AverageJoesTrades Well-Known Member

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    Hey @Ingmar if you have time, what are your thoughts in VIPS?
     
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  5. Ingmar

    Ingmar Member

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    @AverageJoesTrades Hi,
    First i want to say i'm sure there's Wyckoff analysts here on the forum that are less 'fresh' than me and have more experience.
    That being said, i won't mind having a shot without getting into the nitty gritty of Wyckoff analysis :)

    On my weekly chart i've drawn this. I've divided the trading range up in possible phases and marked the Wyckoff events.

    [​IMG]

    Judging the previous reactions at this price level some ranging wouldn't be surprising. However, if the last swing below the range is some sort of spring, the swing up should result in a SOS (sign of strength) above the supply edge of the structure. The rally towards that goal should show ease of movement, increased spread and volume. Climbing price on decreasing demand is also a bullish sign but would suggest strong hands are not participating in the rally.

    [​IMG]
    On the daily chart there's demand present during the rally and even though it's decreasing price keeps feathering up. This is a bullish sign. Regarding the last swing low, i wouldn't be surprised if we are looking at a change of character and from a Wyckoff perspective that would mean the start of a trading range. (long or short, time wise)
    And let’s not disregard earnings tomorrow.

    Curious myself what will happen next.
     
    #25 Ingmar, Feb 10, 2020
    Last edited: Feb 10, 2020
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  6. Bodacious

    Bodacious Active Member

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  7. Ingmar

    Ingmar Member

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    Today i'm looking back at the Nokia chart from a few posts back. I've been checking up on the price action on a regular basis. As i posted earlier, the bias was bullish yet i had a more bearish outlook.
    Today, price has reached the rising demand line on the H4 and i'm interested in whether it will hold or break.

    [​IMG]

    We see distribution (short term) where price reached the demand edge of the structure. There already was supply hidden in the rally up to the lower edge of the range (see previous post's charts) and at the touch we see more supply entering the market, resulting in supply tails on those candles. After that price has been dropping and the swing covers more ground, with multiple gaps, than the one before on less volume. This suggests ease of movement towards the downside. The retracements didn't really rally either and stayed rather weak. This adds to a bearish outlook.
    Here's the weekly chart one more time.

    [​IMG]

    I haven't had the courage to actually trade this though and i still wonder if my analysis is wrong with everyone being bullish.
    I might considering shorting if the demand line on H4 breaks this week.

    It's hard to have a contrarian bias...

    update: A bearish close for today with a full body, nice spread and ease of movement. The demand edge of the channel was broken and tomorrow the previous low at 3.86 will need to be challenged.
    [​IMG]
     
    #27 Ingmar, Feb 25, 2020
    Last edited: Feb 25, 2020
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  8. anotherdevilsadvocate

    anotherdevilsadvocate Well-Known Member

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    I like what you found in NOK on the bearish side.
    NOK is finding a lot of bulls looking for a 5G play, and this one has the added bonus of being under $5.

    Another 5G play was MRVL, but it got a double downgrade 2 weeks ago: "Analyst Karl Ackerman says the 5G opportunity appears pushed out and sees downside risks through 2022 due to "elongated 5G infrastructure spending and unbalanced 5G provider exposure."
     
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  9. Ingmar

    Ingmar Member

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    upload_2020-2-28_10-55-43.png

    that certainly took care of all the breakout traders.
    People i see posting about this stock still seem bullish.
    I’m looking at the two bullish candles at the left as analogue for the large recent candle with the long supply shoot.
    The candles on the left start at the same level and push about as high as the recent attempt. However, result is greatly diminished this time and volume (although still relatively high) is also decreased. Based on this i’d say demand is decreasing and supply has less trouble bringing price down (EOM to the downside)
    I’m still bearish.
     
    #29 Ingmar, Feb 28, 2020
    Last edited: Feb 28, 2020
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  10. Ingmar

    Ingmar Member

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    Nokia update, i shorted it. I found an entry at the H1 after the BU was tested.

    [​IMG]
     
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