Stan Weinstein's Stage Analysis

[lplate]

Re: FRAN - daily chart - trader

Thanks for the thoughts on the topic of breaking through the zero line. (Oddly I notice the "Price" feature on stockcharts does in fact hold its value for all periods, so I must have a think about this again.)
Listed only for a year, so the weekly chart appears just (!) an up-channel, bargain boutique chain Francesca's Holdings FRAN - daily - StockCharts.com looks a Weinstein set up on the basis of a daily chart. Note it tends to retrace after gaps up, so it might retrace after Friday's big move up.
It's in the same sector as Ann Taylor women's wear Ann Inc - weekly - stockchart , which hugely gapped up on results Friday, so there could be momentum in this sub-sector of speciality retail.
Well done on EURGBP.

 

[isatrader]

Re: FRAN - daily chart - trader

Thanks for the thoughts on the topic of breaking through the zero line. (Oddly I notice the "Price" feature on stockcharts does in fact hold its value for all periods, so I must have a think about this again.)
Listed only for a year, so the weekly chart appears just (!) an up-channel, bargain boutique chain Francesca's Holdings FRAN - daily - StockCharts.com looks a Weinstein set up on the basis of a daily chart. Note it tends to retrace after gaps up, so it might retrace after Friday's big move up.
It's in the same sector as Ann Taylor women's wear Ann Inc - weekly - stockchart , which hugely gapped up on results Friday, so there could be momentum in this sub-sector of speciality retail.
Well done on EURGBP.

Thanks, FRAN looks interesting. It's performed very well against the Apparel sub sector over the last year. The horizontal resistance around the 32-33 area would be a good spot to buy a pullback imo. The last daily swing low is at 29.56 and the 50 day MA at 29.13, so a trader stop would go a few points below 29 at 28.98. The 200 day ATR is 1.39, so if you got in at 32.5 then that's 2.53 days average range of risk.

For an investor position, the entry point would be the same but the stop loss would go below the last major weekly swing low of 27.8 and 30 week MA which is 27.28 and so would go below 27, which if you look at the P&F chart would be ideal as that is the major volume support/resistance area. So an investor stop loss at 26.99 or less imo.

The P&F chart has a price target of 46, and the swing rule target would be 33.93 - 20.93 = 13. Add that to the 33.93 high and you get a swing target of 46.93. For a shorter term target I use the ATR(200) personally, and aim for anything above 2.5 days range.

 

[lplate]

Re: FRAN - daily chart - trader

PCLN - weekly 30wk EMA - StockCharts.com
Isa I wondered what you thought of this investor short.
On the one hand the price suggests a near-suitable retrace to breakdown, on low volume, and the breakdown itself was high volume.
On the negative side, though, is that the relative strength is not a break below zero, and the stockmarket (to me) looks bullish. (Hence my increase in posts recently!)

 

[isatrader]

Re: FRAN - daily chart - trader

PCLN - weekly 30wk EMA - StockCharts.com
Isa I wondered what you thought of this investor short.
On the one hand the price suggests a near-suitable retrace to breakdown, on low volume, and the breakdown itself was high volume.
On the negative side, though, is that the relative strength is not a break below zero, and the stockmarket (to me) looks bullish. (Hence my increase in posts recently!)

1. The broad market is bullish using market breadth indicators as a guide. However, we are yet to get a Stage 2 continuation confirmation of a daily close above the previous high. And hence it is still Stage 3 currently.

2. Priceline (PCLN) is in the Consumer Discretionary sector which is just outperforming the S&P 500 on the Mansfield rating and is currently in Stage 3. It's subsector $DJUSTT - DOW Jones US Travel & Tourism Index has broken down into early Stage 3 also.

3. Priceline (PCLN) itself has found initial support from the large drop through the 200 day MA at the top of last years large Stage 3 range. Which is a significant resistance level as it was tested numerous times. Cumulative volume gave a sell signal back in May when it broke below the MA on the weekly chart. The Mansfield RS has been deteriorating since the same time and crossed below the zero line on gap lower on the 8th August. It is currently in Stage 3 after breaking down from a Stage 2B- pattern that had formed since May imo.

So on one hand the market is reasonably bullish technically. However, it can be wise to hedge yourself and so this could be a good option if it breaks down into Stage 4A with a close below 550 imo.

Here's my marked up charts

 

[isatrader]

Re: FRAN - daily chart - trader

On the negative side, though, is that the relative strength is not a break below zero

I have noticed that you've mentioned the zero line on the relative strength a few times in your recent posts, but I don't think you are looking at the right thing as your are not using the Mansfield RS, but instead just a straight relative performance measure.

The zero line that Weinstein refers to in the book is the 52 week moving average of the straight relative performance, and so although stockcharts doesn't have the Mansfield RS indicator built in, you can still see the zero line by adding a 52 week moving average to the Price indicator that you are using.

For a more detailed explanation of the Mansfield RS, Chartmill has an excellent explanation here: ChartMill.Com | Relative Strength (Mansfield)

I've added it to your chart so you can see what I mean:

 

[lplate]

CHS Chico's

I have noticed that you've mentioned the zero line on the relative strength a few times in your recent posts, but I don't think you are looking at the right thing as your are not using the Mansfield RS, but instead just a straight relative performance measure.
The zero line that Weinstein refers to in the book is the 52 week moving average of the straight relative performance . . .[/end of quote]

Thanks ISA, you are right, I thought it was relative strength, not an MA of its relative strength. It will be hard to find a 100% fit, though, will it not !

While on the strength of apparel stocks, CHS - weekly - StockCharts.com looks to be another which has broken on volume on good results today. Chico's Second Quarter Results Top Estimates

 

[isatrader]

Re: CHS Chico's

While on the strength of apparel stocks, CHS - weekly - StockCharts.com looks to be another which has broken on volume on good results today. Chico's Second Quarter Results Top Estimates

Possibly a bit late on this one, as the continuation move was last Friday 17th with the close above 16.24

The swing target is 23.02, but the P&F target is projecting to 29.5 after the strong 5 month move from December where it made around 65% or more. I've noticed that the Mansfield RS traded just above the zero line for four to five months before breaking out last week, so this has a really good technical pattern that Weinstein mentioned in the Uncovering Exceptional Winners chapter. But it needs a pullback to establish and entry point with a reasonable risk reward ratio as currently it's moving too strongly to get in.

 

[isatrader]

Apple seems to be the stock to watch to me at the moment. It's weighting in the S&P 500 and Nasdaq 100 is quite large, and so it influences what the broader market does. Currently it made a Stage 2 continuation move last week, and pulled back yesterday with the broker downgrade to hold which caused some profit taking, but it looks like it's starting to find it's feet again today.

The recent consolidation range gives me a swing target of 762.55, but I'm playing this one one indirectly through the Nasdaq 100 which I've been in since the 6th August.

 

[lplate]

Re: CHS Chico's - question on volume

Possibly a bit late on this one, as the continuation move was last Friday 17th with the close above 16.24 . . . . But it needs a pullback to establish an entry point . . .

isa, thanks for your observations on this and the strength above the zero line.
The volume was ordinary last week, but this week it is high, so that is why I thought it could now be a candidate.

PS One problem with using the weekly charts on stockcharts I've noticed is that at the start of the week the volume is low, so I spotted one chart on Monday night, and, though it showed as large on the daily chart, I thought I would have to leave it till Thursday or Friday before it will actually show a high weekly volume.
Do you know how Weinstein gets around this? e.g. do his charts show a rolling 5-day volume?

 

[isatrader]

Re: CHS Chico's - question on volume

isa, thanks for your observations on this and the strength above the zero line.
The volume was ordinary last week, but this week it is high, so that is why I thought it could now be a candidate.

PS One problem with using the weekly charts on stockcharts I've noticed is that at the start of the week the volume is low, so I spotted one chart on Monday night, and, though it showed as large on the daily chart, I thought I would have to leave it till Thursday or Friday before it will actually show a high weekly volume.
Do you know how Weinstein gets around this? e.g. do his charts show a rolling 5-day volume?

If you look at the ideal volume chart on page 104 in the book, you'll see that the volume doesn't have to pick up until the stock breaks out, and so you don't need to consider it when finding your picks that are close to the breakout point. The way I play it personally, is that I do my due diligence to make sure everything else is in place for the method and then I buy the stock on the daily close above the breakout point. I then use the volume over the following weeks as a confirmation signal, as if it doesn't build strongly with the breakout as the method requires, then I'll just take a quick profit or trail the stop, as without the volume it's more likely to just be a mediocre pick that's less likely to continue too much higher.

So don't be too rigid with the volume as it takes time to show and is why I use the cumulative volume as it's easier to read I find. I suggest if the volume is strong on the daily chart when you get the daily close above the breakout level, then that's good enough to get in if everything else looks right. As remember, in the book he says to use buy-stop orders to get in, but I think this has changed over the years, as I remember him talking on one of the interviews about waiting for a confirmation of a close above the breakout level now.

 

[vali83]

Re: FRAN - daily chart - trader

I have noticed that you've mentioned the zero line on the relative strength a few times in your recent posts, but I don't think you are looking at the right thing as your are not using the Mansfield RS, but instead just a straight relative performance measure.

The zero line that Weinstein refers to in the book is the 52 week moving average of the straight relative performance, and so although stockcharts doesn't have the Mansfield RS indicator built in, you can still see the zero line by adding a 52 week moving average to the Price indicator that you are using.

For a more detailed explanation of the Mansfield RS, Chartmill has an excellent explanation here: ChartMill.Com | Relative Strength (Mansfield)

I've added it to your chart so you can see what I mean:

Isa,
How did you manage to add the MA(52) on the Price indicator? I have difficulties in adding it. It is possible that i pick the wrong indicator, but i am not very sure about it.
The way i am generating the chart is as follows:
1. I go here $INDU - SharpCharts Workbench - StockCharts.com
2. From the Indicators section at the bottom, i choose: Price Performance
3. For this indicator i complete the Parameters value with $SPX
But there is no other parameter to be added to this indicator
Thanks in advance

 

[isatrader]

Re: FRAN - daily chart - trader

Isa,
How did you manage to add the MA(52) on the Price indicator? I have difficulties in adding it. It is possible that i pick the wrong indicator, but i am not very sure about it.
The way i am generating the chart is as follows:
1. I go here $INDU - SharpCharts Workbench - StockCharts.com
2. From the Indicators section at the bottom, i choose: Price Performance
3. For this indicator i complete the Parameters value with $SPX
But there is no other parameter to be added to this indicator
Thanks in advance

Do you subscribe to their basic package or above? As if you are only using the free charts, I don't think you can add an MA to the indicator, as it's a subscriber feature only I believe. Attached is a screenshot of my settings

If you want to see the Mansfield RS on charts, but only use free charts then Chartmill is the place to go as they have the Mansfield RS indicator built in. Here's the link: monest.NET | advanced charts and attached is a screenshot of the settings.

 

[vali83]

Re: FRAN - daily chart - trader

Do you subscribe to their basic package or above? As if you are only using the free charts, I don't think you can add an MA to the indicator, as it's a subscriber feature only I believe. Attached is a screenshot of my settings

If you want to see the Mansfield RS on charts, but only use free charts then Chartmill is the place to go as they have the Mansfield RS indicator built in. Here's the link: monest.NET | advanced charts and attached is a screenshot of the settings.

I didn't subscribe for their service, I am a complete newbie and i believe i should try the free resources at first until i prove to myself that i deserve a more advanced service.
I know about chartmill.com from your previous replies, but as i was trying to scope in the best sector to go with, i discovered that their DJ charts do not show the same data as any other site. For example, if i go on freestockcharts.com or stocksharts.com and i want to see the DJ US Basic Materials Index($DJUSBM), the last close value i see is 271.24. When I try to find the same symbol on chartsmill.com, i cannot find it. So i go for the ticker lookup page ChartMill.Com | Ticker Lookup: Find Stock Tickers from US and European Companies / ISIN. and i find that the symbol for DJ US Basic Materials Index is IYM. Everything is fine until i try to see the chart and i discover that the last close for this symbol is 67.55. Therefore i believe they use a different Index that has the same name.
The reason i am looking at the dow jones indexes is be cause i was looking for free resources to find Sector indexes and list of stocks in that indexes. This i can find here: Industry Sector - Dow Jones U.S. Consumer Services Index, XXJUSCY (DJI) - BigCharts.com. For each index i can find a list of all the stocks.

Anyway what i was asking in the first place i tried to simulate it with freestockcharts.com. They have a RS indicator. Their specification for this indicator is as follows: "
Relative Strength

Relative strength is calculated as the ratio of the active symbol vs the symbol selected in the Relative Strength indicator.
When the relative strength line is moving up, the active symbol is outperforming the RS symbol and under-performing when the line is moving down."

I am attaching one screenshot. Will you please give me a feedback if you think is is the same thing?

Thanks

 

[isatrader]

Re: FRAN - daily chart - trader

Anyway what i was asking in the first place i tried to simulate it with freestockcharts.com. They have a RS indicator. Their specification for this indicator is as follows: "
Relative Strength

Relative strength is calculated as the ratio of the active symbol vs the symbol selected in the Relative Strength indicator.
When the relative strength line is moving up, the active symbol is outperforming the RS symbol and under-performing when the line is moving down."

I am attaching one screenshot. Will you please give me a feedback if you think is is the same thing?
Thanks

Yep, that looks correct to me. So remember the 52 week MA is the zero line for the Mansfield RS.

I didn't subscribe for their service, I am a complete newbie and i believe i should try the free resources at first until i prove to myself that i deserve a more advanced service.
I know about chartmill.com from your previous replies, but as i was trying to scope in the best sector to go with, i discovered that their DJ charts do not show the same data as any other site. For example, if i go on freestockcharts.com or stocksharts.com and i want to see the DJ US Basic Materials Index($DJUSBM), the last close value i see is 271.24. When I try to find the same symbol on chartsmill.com, i cannot find it. So i go for the ticker lookup page ChartMill.Com | Ticker Lookup: Find Stock Tickers from US and European Companies / ISIN. and i find that the symbol for DJ US Basic Materials Index is IYM. Everything is fine until i try to see the chart and i discover that the last close for this symbol is 67.55. Therefore i believe they use a different Index that has the same name.
The reason i am looking at the dow jones indexes is be cause i was looking for free resources to find Sector indexes and list of stocks in that indexes. This i can find here: Industry Sector - Dow Jones U.S. Consumer Services Index, XXJUSCY (DJI) - BigCharts.com. For each index i can find a list of all the stocks.

The price is different with ticker IYM as it is an iShares ETF product and not the sector index itself, so it will have a different price. You can use stockcharts for the sub-sectors as they are all there and you will only be missing the MA line in the price indicator or see if you can find them in your freestockcharts program, which I've just had a look and they seem to have them.

 

[lplate]

Slv

Thanks for suggestion. To try out with an obvious one: Silver ETF
http://img543.imageshack.us/img543/8933/slvweekly.png

 

[isatrader]

Re: Slv

Thanks for suggestion. To try out with an obvious one: Silver ETFhttp://img543.imageshack.us/img543/8933/slvweekly.png

Yep the settings look right to me. If you want a slightly less squashed looking chart change the dropdown setting that says "Regular" to "Big" and you'll get a more proportioned chart.

 

[isatrader]

I've sent a request to stockcharts to add the Mansfield Relative Strength indicator to their site and got the following reply:

"I am sending your message to our programming team for consideration. Unfortunately I can't tell you at this point how soon it will be until we add that kind of capability but we are always striving to make our site more useful."

So if other people request it as well, then they might add it sooner.

 

[lplate]

Re: QCOR another short to add to PCLN

PCLN - weekly 30wk EMA - StockCharts.com
Isa I wondered what you thought of this investor short.
On the one hand the price suggests a near-suitable retrace to breakdown, on low volume, and the breakdown itself was high volume.
. . .

Now at $43, this is a slightly different short in that it is off of a break of an uptrend line on big volume, then a big price retrace to that trendline on a Bank of America upgrade but on low volume.
QCOR - weekly 18 month period - StockCharts.com
This share appears well liked because of its apparently strong fundamentals, and comes up well in fundamental scans, but such a price rebound would be exactly what you would expect as the outcome of a typical PR effort.
Questcor Pharmaceuticals Breaking $40 And Looking Poised To Begin A New Rally - Seeking Alpha
As a negative, I admit it re-breaks over the 30 wk moving average.

 

[isatrader]

Re: QCOR another short to add to PCLN

Now at $43, this is a slightly different short in that it is off of a break of an uptrend line on big volume, then a big price retrace to that trendline on a Bank of America upgrade but on low volume.
QCOR - weekly 18 month period - StockCharts.com
This share appears well liked because of its apparently strong fundamentals, and comes up well in fundamental scans, but such a price rebound would be exactly what you would expect as the outcome of a typical PR effort.
Questcor Pharmaceuticals Breaking $40 And Looking Poised To Begin A New Rally - Seeking Alpha
As a negative, I admit it re-breaks over the 30 wk moving average.

Attached are my charts. I think this is a possible short if it starts to break back down again below the 200 day MA. But currently it's showing some short term positive signs as it's got above the short term resistance, is trading back above the 200 day MA. Also, the Mansfield RS has gone positive again today and the daily cumulative volume has given a weak buy signal.

On the P&F chart you can see the amount of volume has been strongest in the range between 34 and 46, and it's currently moving towards the top of this range after breaching the first resistance at 42.

So it's still in Stage 3B and needs to fall below that 42 level again and close below the 200 day MA for a potential trader entry short. But the Stage 4A major breakdown point isn't until it closes below 34.5 imo.

 

[lplate]

Re: QCOR - sell point

. . . .So it's still in Stage 3B and needs to fall below that 42 level again and close below the 200 day MA for a potential trader entry short. But the Stage 4A major breakdown point isn't until it closes below 34.5 imo.

Thanks isatrader for the analysis. To me, the lower low below the trendline is the key feature. I notice you have drawn the extra trendline to the bottom of the lower low, so you have drawn it like on chart 6-3 Alfin page 166 and chart 6-18 IBM page 178. With chart 6-12 Anacorp and 6-19 Central Hudson, however, Weinstein draws the trendline to the lower low only if the lower low happens to coincide with the trendline. On charts 6-6 Rochester and 6-7 Chase Manhatten, pages 169-170, though, the lower low happens to be below the trendline, and I see QCOR as like those.
I suppose this is the problem with using trendlines, that it is a less exact method than using horizontals. With any break of a trendline, the retest has potential to be that much stronger than to a horizontal (hence "weak bearish"?).
Thanks again.