Technical Analysis. |
||||||
|
Highlight Investments Group |
|||||
|
||||||
|
||||||
 |
|
|
||||||||||||||||
|
|
|||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
April 29th, 2004
NOTE: We discuss our “best trades of the week” here mainly for educational purposes. The trading examples we illustrate are based principally on our volume indicators and market commentaries. Our main intent is to show you how you can apply our volume indicators and to explain the specific correlations that exist between volume spikes and the movement of the indexes. We do not mean to imply that you should follow our exact trades, but rather wish to suggest that you may make use of our volume analytics to develop your own trading style. We also urge you to paper trade before committing your money to the markets.
For this week’s “trade of the week”,
"Buy QQQQ Call #2" is opened
in order to close it later with profit if the index moves
in our favor.
| Security | Return |
| Put #1 (QQQQ June) | +20.00% |
| Call #1 (QQQQ June) | +24.14% |
|
Total Profit: |
+$6,500 |
|
Nasdaq 100 Indicator |
Even though the trades shown above were not entirely without risk, they resulted in a profit of $6,500
Notes:
In the following, we would like to show you the motivating factors that led us to take above trades. For this purpose, we have created what we call a 'Table of Trade Motivators':VMA spike: An enduring uptrend or downtrend does not usually change its course unless the market generates a large spike in the Volume Moving Average to the upside or downside, which is reflective of significant selling or buying activity, respectively. This knowledge allows you to time your mid- and long-term trades.
Resistive volume: When we speak of ‘resistive volume’ or ‘volume to the upside’, we are referring to any amount of volume that is being generated as the index moves up.
Supportive volume: When we speak of ‘supportive volume’ or ‘volume to the downside’, we are referring to any amount of volume that is being generated as the index moves down.
To help you distinguish clearly between supportive and resistive volume, look at a 1-day JavaVolume™ chart using a volume moving average of either 5 or 15 minutes.
| Trade | Volume Motivation |
| Buy Put #1 04/02/2004 |
On 4/2/2004 the market moved higher throughout the morning and into the early afternoon, when two large resistive VMA spikes to the upside appeared, one at 11:45, the other at 12:30. Although these resistive VMA spikes slowed the market’s ascent, they did not bring it to a stop. By 14:00, the market had generated a further resistive VMA spike to the upside. Although it was not nearly as large as the previous spikes, this third resistive VMA spike brought about a short-lived down move. A relatively small amount of supportive volume to the downside at 14:45 then counteracted, pushing the market higher again for the remainder of the afternoon. The close was at the highs and was, in fact, the highest closing level seen in several weeks. |
| Sell Put #1 Buy Call #1 04/15/2004 |
After a slight move down, the market almost immediately generated supportive volume to the downside and picked up after 9:45. A moderately supportive VMA spike to the downside at 13:45 helped slow the market’s decline. Whereas the S&P 500 traded more or less sideways after this supportive volume, the NASDAQ 100 maintained a slight downward bias for the remainder of the afternoon. Shortly before the close, both indexes generated a further, albeit modest supportive VMA spike to the downside. |
| Sell Call #1 04/22/2004 |
As the market
moved higher, it quickly generated a very large resistive VMA spike to the
upside, which came to a peak at 11:30. This resistive VMA spike didn't have
much of an impact on the market other than to slow its advance throughout
the rest of the morning and early afternoon. The market continued its advance until 13:30. At this point the market generated another large resistive VMA spike to the upside |
| Buy Call #2 04/29/2004 Left opened |
After opening, the market immediately began to move lower, but shortly before 10:00 it encountered a moderately large supportive VMA spike to the downside. By 12:30, a very large supportive volume spike to the downside was generated, but the only impact this supportive VMA spike had on the market at this point was to temporarily halt the decline and move it slightly higher through to 13:45. The market continued its decline until it ran into another very large supportive VMA spike to the downside at 14:45. |
These are the trades which netted the returns shown above:
Date |
Trade | Strike | Expiration | Contracts |
Contract Price |
Amount | Profit |
| 04/02/2004 | Buy Put #1 | $35 | June | 100 | $1.5 | -$15000 | |
| 04/15/2004 | Sell Put #1 | $35 | June | 100 | $1.8 | +$18000 | +$3,000 |
| 04/15/2004 | Buy Call #1 | $36 | June | 100 | $1.45 | -$14500 | |
| 04/22/2004 | Sell Call #1 | $36 | June | 100 | $1.8 | +$18000 | +$3,500 |
| 04/29/2004 | Buy Call #2 | $35 | June | 100 | $1.3 | -$13000 | |
|
Total: |
+$6,500 | ||||||
For this week’s “trade of the week”,
"Buy QQQQ Call #2" is opened
in order to close it later with profit if the index moves in our favor.
To see any of our past best trades, simply select from the list below.
|
QQQQ Trading System QQQQ, SPY and DIA trading signals for conservative mid- and long-7 term traders ...
|
NASDAQ Polling Service Visit Sites:
Options Trading
Stock Market Sentiment
Financial Glossary
Stock Market
| RISK STATEMENT: The trading of stocks, futures, commodities, index futures or any other securities has potential rewards, and it also has potential risks involved. Trading may not be suitable for all users of this Website. Analyst research available through this Website does not constitute a recommendation or a solicitation any particular investor should purchase or sell any particular securities. Past performance is not necessarily an indication of future performance. You absolutely must make your own decisions before acting on any information obtained from this Website. |
|
Products ||| Advertise with us
||| Site Map
Disclaimer |
Privacy
|