From 2002 to the beginning of 2003, Nvidia stock (NVDA) was in a downtrend. Notice the blue and red spots on the chart. At the start of 2003, the stock recovered and rose from 2003 to 2006. Detect the price action between the red and the green spots.
During the bullish phase it crossed above the fifty percent Fibonacci retracement level (horizontal turquoise line) of the prior bearish trend. The dark green spot highlighted the retest of the 50% level which provided a viable bullish setup.
After the bullish setup, market participants bought the stock which rose from mid 2006 up to the last quarter of 2007.
Spot the bullish progression between dark green spot and the pink. A second bullish price structure (a higher low) is also noted (see the black spot on the chart). From the highest price level (pink spot) in 2007, the stock pulled back to the
black horizontal line, but failed to find more buyers because
of the 2007-2008 financial crisis.
Notice that swing traders and investors who ignored the trading
triangle (at the orange spot) had to close their positions before the
second down move. At the time of this writing in October 2013,
the stock is "hovering around" the initial 50% Fibonacci retracement level.
TSTW SYS 008 traders should now insert this stock on their watchlist
without assuming anything. Watch the educational videos below to
From 2008 to 2009, smart investors sold Microsoft stock due to the banking
crisis. It fell from $35 to $15. Notice that each time, the permanent bulls or
crazy bullish investors who disregarded the bearish macro economic
environment attempted to buy the stock, a superior bearish force pushed
the stock further down.
In March 2009, as the US Federal Reserve (FED) started its quantitative
easing program, the stock started a new bullsih cycle and rose above the
50% Fibonacci retracement level(turquoise horizontal line) of the prior
bearish season (between the blue and red spots on the chart).
Notice that Microsoft stock pulled back and retested the 50% level on this
monthly chart where smart investors bought it.
Now, will the stock break above the orange horizontal line and retest it
before heading to the greedy price target at the pink spot?
Watch the videos on this webpage to understand how to swing trade like a
professional trader without cutting corners. Learn more. TSTW traders
can contact me on my GMail if they have pertinent or specific questions.
Look at this chart and try to understand the language of the price.
For learning purposes, step by step interpret the price action.
The orange horizontal line is not the fifty percent Fibonacci retracement of the prior uptrend (from the dark green spot to the blue. What is it?
Notice that the price went down in five moves between the blue spot and the red.
Test yourself today and improve your eagle eyes chart analysis.