Bowtie candidates for next week

[DSteckler]

JFR
AEOS
JOSB
MKC
SXT
JTP



1. The MAs shift from proper downtrend order (10-SMA < 20-EMA < 30-EMA) to proper uptrend order (10-SMA > 20-EMA > 30-EMA). What you're looking for is for the MAs to converge and then spread out again, giving the appearance of a bow tie.

2. Today's low must be less than yesterday's low.

3. Tomorrow, place a buy order 1 - 2 ticks above today's high good for tomorrow.

4. If not filled, continue to work the order above the prior day's high good for the next trading day until either filled or the stock trades below its 20-day EMA.

5. If filled, place a protective stop below the low of (2).

[Runner]

JFR
AEOS
JOSB
MKC
SXT
JTP



1. The MAs shift from proper downtrend order (10-SMA < 20-EMA < 30-EMA) to proper uptrend order (10-SMA > 20-EMA > 30-EMA). What you're looking for is for the MAs to converge and then spread out again, giving the appearance of a bow tie.

2. Today's low must be less than yesterday's low.

3. Tomorrow, place a buy order 1 - 2 ticks above today's high good for tomorrow.

4. If not filled, continue to work the order above the prior day's high good for the next trading day until either filled or the stock trades below its 20-day EMA.

5. If filled, place a protective stop below the low of (2).

Great stuff Dsteckler, I prefer to sit out the open and never place order in ahead of the open. I’ve been burned with a gap open followed by a fade and sell off. I think it is prudent to check out the action first before jumping in. What are your thoughts regarding this?

[Robbb24]

Hey Dave...some nice index breakouts this week. I'll try my hand here at posting a few charts and see how this works. Should we ask some of the better traders off the EI Board to move over here?

http://stockcharts.com/def/servlet/SC.web?c=$rut,uu[w,a]dhcayiay[d20050102,20061231][pb50!b200!f][vc60][iub14!la12,26,9][J53995660,Y]&pref=G

http://stockcharts.com/def/servlet/SC.web?c=$indu,uu[w,a]whcayiay[d20030102,20061231][pb50!b200!f][vc60][ila12,26,9][J48722860,Y]&pref=G

http://stockcharts.com/def/servlet/SC.web?c=$compq,uu[w,a]dhcayiay[d20050102,20061231][pb50!b200!b20!f][vc60][iub14!la12,26,9!lp14,3,3][J53361968,Y]&pref=G

[DSteckler]

Welcome, Rob! I've already invited a few of the EI board traders over here; we'll see if they accept the invitation.

There's definitely an advantage in waiting to see how the candidates trade in the first half-hour or so. Too many times we've seen gap and craps or MMs spike the offer to suck in buyers and then dump the bid. The downside risk is that the stock hits the buy stop and keeps moving higher, never giving you the chance to get in at the pvit price.

My personal trading style is to wait and see. If that means I miss one or two because they kept running, so be it. I'm more concerned with not losing money than making money.

[RL]

Hi ROBBB THANKS FOR THE CHARTS. IS THIS YOUR FIRST POST? IF SO WELCOME ABOARD LOOKING FOWARD TO YOUR POSTS

[DSteckler]

Rob is a great trader and comes up with some excellent ideas, Ray. I encourage you (and everyone else) to read his posts.

[DSteckler]

This chart shows two examples of bowtie crossovers, the first down and the second up.

http://www.ttrader.com/mycharts/display.php?p=38161&u=dave&a=MyCharts&id=690

The white ellipses show where the crossover occurred.

[skiracer]

This chart shows two examples of bowtie crossovers, the first down and the second up.

http://www.ttrader.com/mycharts/display.php?p=38161&u=dave&a=MyCharts&id=690

The white ellipses show where the crossover occurred.

Dave,
Do you usually use the daily charts exclusively when looking for and finding your bowtie candidates?

[DSteckler]

<< Do you usually use the daily charts exclusively when looking for and finding your bowtie candidates? >>

Yup. It's a swing trading technique so weekly charts aren't applicable. It can be implemented using intraday charts but you'd want to trade a larger number of shares to make it worthwhile.

[skiracer]

Dave,
Two questions. You mentioned larger share position taken on intraday charts. Would that be a daytrade if taken on an intraday chart and how do you gauge the # of shares taken in that type of situation. Do you know or have you heard of a fellow named Deron Wagner.

[Runner]

I’ve been using the bow tie set up for a little while and I like it. I mainly use it as a trend quantification. I don’t buy on the cross over because I like to see the trend resuming. What I notice is stocks in a nice uptrend will often bump the 10 or 20 ma’s. Sometimes the P/B for trigger might only be a few days. It also is pretty simple in nature. I also pay close attention when all 3 of the ma’s converge. I have found that this normally leads to an explosive move.

[Robbb24]

Hi Ray and Dave....thanks for the welcome. Ray yes this is my first time posting here. I do keep my charts over at this link if you are interested.

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID897936

A lot of nice looking setups off the setups list which starts on page 11.

CAT looks like its ready to make a move here.

GRMN is also basing out nicely.

One quick question on charting....when I try to post an individual annotated chart such as the two above they don't seem to take....rather just a basic one shows up. For example here is the CAT setup which should come out with an annotated chart. You can copy and paste the whole link into your browser to see my setup but not sure why the complete link doesnt take versus just a plain basic un annotated chart.

http://stockcharts.com/def/servlet/SC.web?c=cat,uu[w,a]dhcayiay[d20050307,20061231][pb50!b200!f][vc60][ila12,26,9][J63566378,Y]&pref=G

Thanks for any help.

Rob

[dmk112]

Hi Ray and Dave....thanks for the welcome. Ray yes this is my first time posting here. I do keep my charts over at this link if you are interested.

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID897936

A lot of nice looking setups off the setups list which starts on page 11.

CAT looks like its ready to make a move here.

http://stockcharts.com/def/servlet/SC.web?c=cat,uu[w,a]dhcayiay[d20050307,20061231][pb50!b200!f][vc60][ila12,26,9][J63566378,Y]&pref=G

GRMN is also basing out nicely.

http://stockcharts.com/def/servlet/SC.web?c=grmn,uu[w,a]dhcayiay[d20050307,20061231][pb50!b200!f][vc60][ila12,26,9][J66030768,Y]&pref=G

Hey Robb, I don't know if you're aware of this but MM has actually created a thread for you, I don't think you have posted there yet but there are 3 pages of responses awaiting your arrival.

[DSteckler]

Dave,
Two questions. You mentioned larger share position taken on intraday charts. Would that be a daytrade if taken on an intraday chart and how do you gauge the # of shares taken in that type of situation. Do you know or have you heard of a fellow named Deron Wagner.

Yes, it would be a daytrade. If a swing trade taken using a daily chart makes me an average gain of 3%, for example, and I was buying $1,000 of stock, that would be a $30 profit. If using intraday charts I anticipated making a 1% gain before the price fell back to the 20-bar EMA, I would buy $3000 of stock so I could make the same 3% profit. As a general rule it doesn't work out that nicely, however, which is why I prefer to trade the signal using daily charts.

No, I haven't heard of Deron Wagner.

[IIC]

Hi Ray and Dave....thanks for the welcome. Ray yes this is my first time posting here. I do keep my charts over at this link if you are interested.

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID897936

A lot of nice looking setups off the setups list which starts on page 11.

CAT looks like its ready to make a move here.

GRMN is also basing out nicely.

One quick question on charting....when I try to post an individual annotated chart such as the two above they don't seem to take....rather just a basic one shows up. For example here is the CAT setup which should come out with an annotated chart. You can copy and paste the whole link into your browser to see my setup but not sure why the complete link doesnt take versus just a plain basic un annotated chart.

http://stockcharts.com/def/servlet/SC.web?c=cat,uu[w,a]dhcayiay[d20050307,20061231][pb50!b200!f][vc60][ila12,26,9][J63566378,Y]&pref=G

Thanks for any help.

Rob


Oh...you are that Rob...BTW: For those looooooong links feel free to use my URL shortening service at http://trimurl.com (http://trimurl.com/) It is free.

I have taken the liberty of trimming your link so the whole thing is hyper-linked http://trimurl.com/3VO

Welcome...Doug(IIC)

[Robbb24]

Oh...you are that Rob...BTW: For those looooooong links feel free to use my URL shortening service at http://trimurl.com (http://trimurl.com/) It is free.

I have taken the liberty of trimming your link so the whole thing is hyper-linked http://trimurl.com/3VO

Welcome...Doug(IIC)

Doug thanks much....thats a nice service and should come in handy in the days ahead.

Rob