Trading With QCharts

[Mike Condra]

Please examine this chart of daily MSFT with a 100-period, 4-multiplier Keltner channel.

Since 10/2000 one could have traded profitably 11 times as follows:
- Sell breakouts above the upper channel, covering at the center
- Buy breakouts below the lower channel, covering at the center
Positions typically last 3-4 months, with 4% drawdown or less.

The last two moves appear to have yielded 3.8% and 5.1%. Use QCharts' price-measurement tool to measure that. First, make sure the Cursor Data Window is visible. Then, click and hold the left mouse button over one price, drag the mouse to another price, and release the left mouse button. The percent price difference will be shown in the Cursor Data Window next to the label "Csr %".

One can switch to smaller-timeframe tools after a breakout occurs to fine-tune the entry.

Please do your own due diligence. My suggestion is you/we try to find more stocks behaving this way.

[Mike Condra]

Testing.

Here's another interesting image. In June 2002, LMT made a top very close to the 127% expansion of a multi-year swing. It then bottomed twice between 40 and 90 weeks later, at about 61% and 50% of other multi-year swings. Those numbers are significant from a Fibonacci perspective, and are built into QCharts as AutoWave(tm) study defaults.

The change in national leadership seems to make it more likely that LMT, like other defense stocks, may suffer a reversal. The next congress and administration could have very different agendas for defense. That uncertainty creates risk and increases the possibility of a decline.

Bottom line. This stock appears to be setting up for a reversal.

Do your own due diligence please.

This image is from the new QCharts 6.0 beta using eSignal data.