More Sweet Setups
March 5th, 2006 by BWV
Although I’ve recently expressed concern for the general markets, I’m still finding an abundance of strong stocks offering low-risk entry points.
I’ve also been doing a bit of programming in TradeStation.. and figured out how to place a white “7″ below any daily bar that qualifies as NR7 — meaning it made the narrowest daily range (high minus low) of the last seven days
This event signifies a meaningful reduction in volatility. Because volatility comes and goes in cycles, NR7’s portend resumptions of bigger price movment.. soon.
I’ve also figured out how to place yellow arrows on the chart where I bought or sold.
This KNDL chart is a beauty.
- A hugely positive reaction to their earnings release
- Stock holding above the close on earnings day
- Four straight NR7’s
- Volume decreasing as volatility and interest in the stock dry up
- Volume increasing on Friday with a close near the high of the week.
KNDL is a competitor to SFCC — a stock with fraud issues — and KNDL could benefit by taking their customers. I’m long right now, and will probably add more this week.
ENG is experiencing 2 months worth of range contraction.. digesting the early 2006 big volume up move. I love the mid-Feb series of NR7’s.. which led to a quick spike down and nice high volume upside reversal last week.
The last 2 days had tiny ranges, and I think ENG is likely to bust out of this triangle very soon. Earnings should be coming soon (last release was 12/2/05), so I’ll just be waiting and watching for now.
Long KNDL
