Technically Speaking Technical Analysis and Options James Boyd 9 4 19

Articles


The date’s September 4. We welcome you. If this is your first
time here, we welcome you. If you’re a returning
user, we welcome you again. Great to be with you. Hello, Edward, Farzad, Jack,
also from South Hampton, New York. Jack, you might have
been watching the US Open last night. Boink. Crusher there. Won’t go there. Probably make me cry on
that US Open last night. Let’s go ahead and get started. Also, want to give
you a quick reminder. You can follow me on Twitter,
Jay Boyd underscore TDA and I’ll show you that as we get
started here just @jboyd_tda. Some quick reminders. As we talk about stocks
and options here today– the topic is technical
analysis and options– we’re going to talk about the
stocks and options, not just one or the other. Remember, though, that
as we talk about options, remember that options are not
suitable for all investors. There’s special risk
inherent to trading options. Please make sure you read
the previously provided copy of the characteristics and
risk of standardized options. Also, in order to demonstrate
the function of the platform, we’re going to use
actual symbols. We will. And also remember that
TD Ameritrade does not make any recommendations or
determine any suitability of any security or strategy
for any individual traders. That is up to you to decide
what you want invest in. And also when we talk
about the options– delta, gamma, theta,
vega– know how it applies in general
but also to the strategy. What are we going
to cover here today? Well, first we’re going to
take a look at the index, quick sector update. Second, we’re going to look
at new breakout examples. We’re going to talk about those. How do we find those on the
chart and on the market watch? We’re going to talk about
past examples in terms of management. And we’ve got a number of trades
that we need to talk about. And also real quick is
the learning outcome that we want to be able
to do is how are we able or how can we find
these breakouts. And I’m going to
talk about breakouts from a couple different
points here today. So that’s our learning outcome. I want to show you from a chart
perspective and a market watch perspective how do we do that. So first off, let’s go to just
real quick the screen here. Let’s take a look at the– one thing I’m going to do– let’s go just real quick. We’ll zoom in on this chart. And if we take a look at
that, it’ll just real– [AUDIO OUT] I’ll slide that over. Might have a little
technical glitch. [AUDIO OUT] Resistance is still at 29:37. We see that. The one thing
you’ll notice is we did come down to really the
midpoint of the channel. We did not break down through
the midpoint of the channel. And now what you’re going
to see, in this case, is– now let’s actually check. If you can hear me and see me– OK. It looks like we’re good. OK. All right. Perfect. I’ll be watching that
on the audio/video. So one thing you’ll notice
is we came down to a support. We went up to a resistance. We fell down. And now we’re back up near that
resistance level right now. So the S&P, when
you go back and look at let’s say the
last month or so, you probably are thinking this. Geez, I wish I would
have done more, for example, short
vertical puts, or I wish you would have done
more short put strategies, because in the last month
this has actually been a very interesting two strategies. Now there have been some
stocks that, for example, there have been some stocks that have
been having relative strength. And we’ve seen those. Now what I’m going to do is
let’s also take a look at– OK. So the S&P we would
still say is neutral. No change in posture there. When we actually go
back to, let’s say, the NASDAQ, what
I’m going to do is you’re going to see the NASDAQ. Same type of idea. Not yet going back
up above resistance. But again in the
last couple days, we’ve been staying
more in the middle to the top end of the channel. What does that mean? That really means that
there’s probably some sectors, or I should say industry
groups within technology such as semiconductors–
did I say semiconductors? Yes. Semiconductors– that are
probably up near that top of the channel or breaking out. We’ll talk about those. Volatility– when we
take a little volatility, we’re still seeing
VIX still elevated, which is probably
saying the market is fluctuating probably greater
than 1% on a daily basis. And we’ve seen that as well. Now when we come
back to, for example, let’s say the sectors– and I’ll bring this up. And I’m just going to
state some of the sectors that we might be
taking a look at. Some of the sectors that we
might be looking at are– and I’m just going to
state these nice and slow. Number one– and I’m going
to say sectors first. We might be looking at
technology stocks one. Second would be consumer
discretionary the sector. The third would
still be utilities. And the fourth would
actually still be staples. Now two industry
groups I want to name. Number one, semiconductors. Number two industry
group I want to name is aerospace and defense. Now when we look at the one week
change here, what you’ll notice is we are seeing that energy and
basic materials are up on top for the week. But what you’ll notice is– and
I’m going to say industrials. I really want to say
aerospace and defense. There’s utilities. There’s discretionaries. And what you’ll notice
is there’s tech. And there’s consumer staples. We wouldn’t maybe look
at these maybe as much, excuse me, the E and the
B, just because those are really more of
a downward trend if you’ve actually
looked at those. Does that make sense? Those are more of
a downward trend. So I’m going to recap. Technology, consumer
discretionary, utilities, and staples, four sectors
that we might look at from a relative strength. And we talked about
that last week. Where are the areas
of relative strength? And we labeled two
industry groups that we could actually
look at as well. And those would
be semiconductors. And the second industry group
would be aerospace and defense. Now with that in mind,
let’s now go to some charts. And I want to show
you something. OK. So I ask you each time we get
on here you can, for example, follow me on Twitter. Well, if you’re like
me, I didn’t even know what Twitter was. I remember someone at
the NFL finance camp asked me what is your handle. I remember looking at
the NFL player saying, I don’t know what
you mean by handle. OK. So when we talk about
going to Twitter, you’re going to see up at
the very top @jboyd_tda. I want to give you a
little taste of what we’re talking about here. And this will be a help. So if you went to twitter.com
and you search @jboyd_tda. Now some of the things
we’re going to talk about is going to be right with
what I tweeted earlier today. So for example,
you’re going to see that I posted in here examples
of how do we find 20 55 day high breakouts. And I gave what we call the
scripts, the six letters. And we’ll see those right there. And I also gave a picture of
what they really look like. And I updated those
earlier today. Those are updated. Second thing what
you’re going to see is I’m also going
to be showing here today how do we actually
see these breakouts from our perspective of. And this was also today as well. But if we actually scroll down,
what you’ll notice in this case is, if you take
a look, how do we get it to where we
can see the breakout on the chart like
that green line or the breakout, that gray line? How do we do that? Well, those scripts
are right here. They are actually right here. And also earlier today I talked
about the examples of gold and does technical
analysis really work on– does it really work
on intraday charts, like a 15 minute chart,
a 30 minute chart? And also maybe if you
want to talk about it, does it maybe work
on an hourly chart? And I showed an example of
how it might work potentially on a intraday chart. This was a five day 15 minutes. So when I say follow
me on Twitter, I’m going to be showing
examples of maybe some things that you might be looking
at as a technician or a fundamentalist. These are three examples that
I talked about just today. Now I’m also
pointing out Twitter, because you can also–
some of the things I talk about today in the two
recent posts right up top, you’ll actually see those. And we’re going to talk
about this up top first. So first off, how do we
actually put these on? OK. So what I’m going to do is
I’m going to actually go in. And I’m going to really go
right back to the platform. And I’m going to go right
up to where it says set up. I’m going to go to where
it says Open Shared Item. So I’m going to go to where
it says Setup and then Open Shared Item. Now Setup is at
the very top right. OK, very top right. And you’re going to
see it right there. Top right. Now once I click on
Setup, we’re going to go to where it
says Open Shared Item. And we can see that right there. Now if I get to here,
I’ll get dang close. If I click on that now,
what I’m going to do– Setup, Open Shared Item– I’m going to type in
these six letters. And now this has been
updated as of today. I’m going to type in capital
B. And this is case sensitive as I stated. B, lower case f for Florida,
T for tango, Q for Quaker, capital R for rocky,
and capital D for dad. Now if I just got a hold
right there, now what you’re going to see is I’m going
to just now click on Preview and then just click
on OK or Open. Excuse me. Type in the six letters. It is case sensitive. And I’m going to click on Open. Now if you say, well,
James, I didn’t get this, you’re probably not
following me on Twitter. That’s why I showed the Twitter. Now if I clicked on,
let’s say, Open, now what you’re going to see
is it will say, OK, what do you want to do now? Let’s click on what
we’re going to rename it. Now if you don’t mind,
I’m going to rename it. And I’m just going to label
this as, in this case, 20 C for the class today. It’s the 20 day
high breakout today. Now if I do this and say
now, OK, let’s save it. There it is. We can now go to any of
these column headings. And what I’m going
to do in this case is I’m going to right
click on that line. OK. Right click on that line. Customize. And now what I’m going to do is
I’m going to type in just 20 C. Now once I actually
do that, I’m going to make sure that I push
it over here to the right. OK. And now what you’re
going to see is that 20 C is over there on the right. The way we got here is we right
clicked on the column heading and went to Customize, 20 C. And
now I’m going to click on OK. OK? Now what it’s going
to happen is we’re going to now start to really
see how some stocks are making 20 day highs. Now if you missed
that, if you said, James, I want to see that
again, if you don’t mind, let me just show it to
you just real quick. And I’m going to bring this up. And now what I’m going
to do is if you said, James, I didn’t get that, can
you show that one more time, let me show that to you. And what I’m going to
do is I’m going to go to Setup, Open Shared Item. I’m going to type in
capital Y-C-B-V-S-P. These are randomly generated. OK. Six letters. We’re going to use those. Let’s click on Preview again. So there it is. Preview. Open. Now once I do that, I’m
going to click on OK. We’re going to rename it. In this case, what
I’m going to do is I’m going to name that
really 20 C like we did before. Think I typed in the wrong– there it is. Let’s check that. And now what I’m going to
do is on any of these column headings, I’m going to right
click on it and say Customize. And I’m going to take
off really what I have. And I think what it’s doing is
it’s messing up what I actually have because I have it on my
other computer right here. I’m going to go 20
C. It’s right there. And I’m just going
to say Add Item. Now what that should
really do in this case is it should bring up– it should really
bring up– and this is a computer I’m not really
using as much or at all except for class. But it should bring
up some stocks that actually meet the criteria. And it should really
label this as one with a yellow saying
it meets the criteria. For example, if it says zero
with a white background, it’s really saying it does
not meet the criteria. Now what I’m going
to do is I’m going to take a look at some stocks
that might be actually hitting really the breakout in
terms of our examples. Now I’m going to fast
fire through a couple. And one of the stocks that would
actually meet the criteria here today would really be WDC,
which is Western Digital. And now what you’ll
notice on Western Digital, it is a stock, for
example, that really had a resistance right
around about 57 and change. Now what you’ll notice is
when I draw that resistance, this is also going to
be showing something that would be breaking out
of a 20 or 55 day high. And we could see that. It’s a breakout. It’s a breakout of where
we were the last 20 days. It’s a breakout of
where we’ve really been over the last 55 days. Now here’s the deal. In this case, what you’ll
see is it pop to the upside and it faded back. Why? Well, that was a pretty big
move actually here today. The stock really went from
57 all the way to about 64. It’s a $4 move on about
a $57 stock or $56 stock. That was a big move. Some people may be profit
taking a little bit, made a higher high,
pull back, and now could be sitting maybe where
that old resistance turns into a new support level. Now how can we see the
breakout on the chart if I want to see it? Well, let’s go back to it. So if you scroll down just a
little bit, what you’ll notice is if you want to see the
breakout on the chart, what you’ll see is those
scripts, the codes, if you want to call it that. 20 day high would
be right there. And a 55 day high script
is really right there. I want to mention
right now, if you say I want to use my own
customized time frame, let me show you how
you could do that. OK. Now in this case,
what I’m going to do is I’m going to bring up those. And I already put those on. I’m going to go to where it
says Edit Studies, right there right where that test tube is. And now what I’m going
to do is click on that. I’m going to click right on 20. And the 20 day high
is right there. You follow the
same format as what we did when we typed
in the 20 day high. Now what you’ll notice is
that little sheet of paper right there, that’s
what we call the script. If you want to customize
the time frame, all you would have to do
is change out that number right there. And you could say, look,
I want maybe 10 day high. I want 15 day high, 25 day high. I’m just using 20 and
55 as a starting point. 20 has something more
shorter term, about a month. The 55 is really being
more of a 2 and 1/2 month type of breakout setup. Now if we take a look at this–
so that’s how we put it on. And what I’m going to do is I’m
going to just kind of change that real quick. And I’m going to
change the width. And the width I’m going
to do there is let’s make it where it’s a green color
and maybe the style is maybe a highway strip. Click on OK. Next what I’m going
to do is I’m going to imagine that I
typed in the scripts like we just showed before. Type it in. I label it 55 day high. Double click. I’m going to make sure that I
fatten this line a little bit. Same thing, highway strip. Width is three. I’m just fattening the line
a little bit for class. And now what you’re
going to see is I’m going to change the
color to a black color. Now when we do this,
now we can actually see what is actually going on. Now if I take a look
at this today, what you’re going to notice
is we have a green line. The green line, that
would be the 20 day high. And the black line
right there would really represent the 55 day high. What you’ll notice is today
it really hit both of those. This goes back to the idea
of trade what you can see. The problem is if you can’t
see it, how do you trade it? You don’t. Does that make sense? So whether we want to see
it on the market watch or we actually want to
see it on the chart, we’re letting the tools help us. Remember though if you want
to change the time frame, be my guest. I’m just giving you
the template and then you can change the time
frame that you want to see. Now the example
what I want to give here is I want to right
click on this chart. I want to actually go down
to where it says Buy Custom. And I’m going to go where
it says With OCO Bracket. Now in this case,
what we’re going to do is we’re going to buy
the stock and maybe a little bit of
fluctuation here. We’re going to look and
see can we set a stop maybe underneath this flat
horizontal old resistance. That would really be about 57. And I’m checking on that. $57.45. That’s where the
horizontal resistance was. Resistance really being, if we
take that number of resistance less 2% to 3%,
it’s really $56.30. OK. So if we go to,
let’s say, $56.30, what you’re going to
see is that’s the stop. That’s saying if we buy
the stock, we have it. If the stock were to go
to that price or less, it would trigger to be
sold at that price or less. Day to GTC. Now targetwise, where could
that stock potentially go to? Where’s the next level of
resistance on that chart? Well, if I go back and
really look at this and say where’s the next
level of resistance, at least on a one year graph,
I’m not really seeing a whole lot of
resistance right there. And when we look at, let’s
say, a two year chart, we go back and look at, let’s
say, that two year chart– bring it up– you’re not really
going to see a whole lot. I think the only
thing at about 60, yet another level about
right there back last August, which was about 65, and
then anything past 65 is probably getting in
some of the area of 76. So what I’m going
to do in this case is I’m going to set up
initial price target at $65. And if we type in $65– there we go. Day to GTC. OK. There we go. So we have a target at $65. We might say higher than that. We’ve talked about that. We have a stop at
$56 and change. Let’s verify that. That’s fine. And that’s also a stop GTC. Now for the sake of time,
what I’m going to really do is I’m going to go ahead
and go down to where it says Confirm and Send. OK. And if I click on Confirm and
Send, there it is right there. In green, that
means we’re buying. The two orders in red
mean we’re selling. Now Paul’s question is, is
there an existing 20 or 55 day high moving average script? Are they the same? I don’t know of any
existing 20 or 50 day high. I don’t know of any. So I would say initially
is I don’t know of any. And I would double check. If it says 20 or 50, they’re not
the same, different time frame. You might want to
double check that. Now let’s go back and show this. OK. When I go back
into this test tube right here, if someone
said, well, how would I know if they’re
different, well, the key is I would know
they’re different on the chart because if the black
line is right there, the green line is right there. So they’re different. But if I said, well,
how would I really know that they are different? Well, one thing you
could do is you can right click on the line. Right click and say edit the
study of the 55 day high. If I click on that,
what that will now do is it’s going to bring up, let’s
say, the code for it as well. And you should be
able to see that, or you could actually say I
want to go back to the test tube and then just click
on that sheet of paper and see what number
comes up, Paul. OK. So I just want make
sure you reference that. So what I’m going to do is
I’m going to click on OK. Second example
what I want to do– and I’m going to speed it up a
little bit in terms of stocks. So another example
that we saw today that met the criteria–
now James, when you say the criteria,
what does that mean? The criteria actually means that
the stock hit that 20 day high. And it hit it two days ago. Does it mean that the stock
is guaranteed to go up? No. It doesn’t mean that. What you’ll notice is
actually today again it hit the 20 day high again. Now James, does it have to
hit the 20 day high and the 55 day high? No. Think of the 20 day
high as something that’s going to probably get
you in earlier, like here. But if that stock goes up
over a longer period of time, what you’ll notice is that
green and black line can overlay on top of each other. And it’s just really
saying we’re probably at an all time recent high. OK. 20 day will probably
get you in earlier. If you’re getting in when
the stock is at that 20 day high or the 55 day
high both, that’s just saying the stock has
probably gone up for a while or it is at an all time high. Excuse me. So Micron. So you’re seeing that on
Micron, which would probably lead you to believe
that probably Nvidia’s getting a little bump. And it is. OK. Other stocks that might
be in there in terms of semiconductors ATVI. Now James, how did you
find these examples? Are these random? Well, no. I actually looked at the
NASDAQ, brought it up on the market watch. And then what it did
is it just gave me the stocks that were meeting
the criteria of hitting the 20 or the 55 day high. That’s how we found these. OK. Now that’s also part
of learning outcome. How do we find them? Well, we could
type in the scripts and use them on the MarketWatch. Or we could visually
bring up each stock and see if they are
hitting the actual charts. Now, for some you
might think, well, James, that just sounds
like it takes a long time, I want to make sure that
you’re aware of something. If we had a NASDAQ
list right there– you’re going to notice that
we have this right there, which says no one. We also have this right
here, which says number one. That means that the list and
the chart are synced together. So whatever I click on
on the left hand side shows up on the charts. Does that make sense? So when I click
on, let’s say, MU here, it shows MU on the chart. When I click on LRCX,
what does it do? It pulls it up on the chart. We talked about that
one two weeks ago. So if you take a look at that– by the way, that also
hit the 2055 day as well, hit back about two
or three days ago. I think there is one
advantage to this. The one advantage to this
is when you look at this, you can go back and see
where those breakouts could have been. Does that make sense? If at any point that
chart price touched the line of the 20 day
high or 55 day high, it could trigger
a potential entry. That does not imply that
it’s going to keep going up. But it’s just saying it’s
meeting the criteria. OK, I think we’ve hammered that. Now, I want to bring up
something a little different because on one of the tweets
that I actually posted here today, I really
talked about gold. And I want to bring this up. And I want to talk about it
from the standpoint of a futures contract. The ticker that I’m going to be
using is /MGC, Mary, Georgia, Colorado. And what I’m going
to do– now, some you might be familiar with
an ETF that tracks gold. But I’m going to bring up, for
example, just one of these. And the example that we’re
going to give here is gold. Now, what is it that
you notice on gold? Well, we see a upward trending
30 day moving average. That’s the red line right there. We can see that. The second thing we
notice is the price is above the blue line. That’s the 10 day
moving average. The red line tells us
something about trend. The blue line tells us
something about momentum and where it is at
this point in time. What you will notice
over the last couple days is that price has
been punching those. Now, James, why is
green and the black line on top of each other? Because it’s making
a 20 day high, and it is also making a 55 day high. That’s why. Does that make sense? I’m going to show an
example of a futures trade. Now, in this example,
understand when we talk about futures
it’s not for everyone. This is a paper money example. Beware of the risk. This is a paper money example,
and I’m going to show that. What I’m going to
do, in this case– let’s bring up an example of
how would we bring that up. What I’m going to do is
I’m going to go the trade page right there. And what I’m going to do– now,
if you said, James, where would I find a list of these
right to when we go trade? I’m going to hit the dropdown. When we hit the
dropdown, you’re going to see there’s a section
right there that says futures right there. If I clicked on futures
right there, if I did, what that would do
is it would give me the list of the futures. And we’re looking at
what’s called the micros. And when we click on,
for example, the micros, it’s really– for every one point
it moves up or down– the price of gold
was to go up $1, we make $10 unrealized profit. If it were to go down $1, we
would lose $10 unrealized loss. If it moved $0.10– Run the numbers. It’s a dollar. So for every point
we go up 10 bucks, every point we go
down we lose 10 bucks. Now remember that this is
not trade normal hours. This trades over the
night during the week. And what I’m going
to do is I’m going to right click on the ask. I’m going to go down
to where it says “buy.” And I’m just going to
click on– actually, let’s just left click where
it actually says “ask.” And what I’m going to
do for this example is we’re going to go long. So it’s a future. We can see what type
of product is it? Future by plus one,
that’s one contract. And the contract
expires in 85 days. So this has similarities of,
like, an option contract. But you don’t have
implied volatility. This is looking at
the price movement. Now if we take a look at this
there’s the contract, the /MGC. And it says Z19. That’s really for the
December expiration of 2019. There it is. And here’s the price. Now, here’s the test. Let’s say the goal were to go
up, let’s say, one point, $10. Two points, $20,
three points, $30. As simple as that. Now what you’re going to see,
if I go confirm and send, the risk is that gold can
go all the way to zero. It could, OK. And I’m just showing this as
a paper money example, first. But if you say, James, I’d like
you to show a stop on this, let’s show that. Let’s go, first, triggers SEQ. And let’s actually right
click on this line. Just like we would
with it, we’re going to say “Create
an opposite order.” For our example, here,
what we’re going to do is we’re going to set
the stop in this example about 30 points lower than where
we actually enter the position. So in other words, if
we got in that position, let’s say, at about 1563,
and we set a stop down at, let’s say, 1533, that’s $30. If for example, let’s say, each
point is worth, let’s say, $10. That potential risk is $300. Now just like stocks, there can
be gap risk over the weekend. OK? Now if we go ahead and say– and it could even be
in the after hours when they close for an hour. If I click on Stop
and then Data GTC, now, what we’re
going to see is we’re long the gold contract,
the gold price at 1563. Second, what you’re going to
see is we have a stop at 1533. 30 points, each point being
$10, that potential risk $300. If we now go confirm
and send, I want you to also pay attention to
what we call that buying power effect. This is how much money
we’re setting aside to be in the contract. OK? So I need $675 to place this
order to have exposure to gold. Now this contract of e
micro gold futures is not your standard contract of /GC. It’s not. OK? This is a 1/10th scale
of that bigger contract. Now, can you do two contracts,
or three or four or five? Yes. But we’re just showing
one example or a contract. Now you need to also
remember, there’s the transaction fee to buy. There’s also the
transaction fee to sell. And each day we actually get
what’s called a mark to market. We get an update of
that profit or loss. Now if we go ahead
and say, OK, that’s what we want to do in
our paper money account. To see an example, I’m going to
now click on “Send that order.” Now what you’re
going to see is– now we can go down at the bottom
and kind of get a little feel of what’s going on here. So first off, what
I want you to see is when we take a look at
that, we can see if we’re down, let’s say, $3, how much
is it really down so far? Well, it’s really down about
$.30 from where the entry is. Now some of that is
the spread, though. Now, I want us to practice that. Because we talked about
using micro futures to hedge the portfolio with
the S&P, NASDAQ, and the Dow. But this is also maybe another
way where if there was, let’s say, fear in the
market, and investors did not want to buy stocks or
maybe buy treasuries, they might look to
maybe potentially buy, let’s say gold. Now one last thing I’m
going to say on this– and when we go to the charts,
I’m going to take this and say, let’s go back to,
let’s say, something the time frame of a five
day 15 minute time frame. Now if we go back
to it, and this is kind of my point of quote
“technical analysis,” what you’ll see is what we’re
talking about on the daily chart is the same thing on
the interday chart. So for example, that right down
here at a price of about 1548, it says, James,
you’re really hitting that high or in other words
hitting the green line. So it would give
a setup of 1548. You would not actually get an
entry set up to about 1558. So there was about a
$10 difference, which on one contract was how much. It’s $100. one gets you in earlier because
there’s a shorter term frame. The black line, that
55, it lags more. And it was $10 higher than
where the green line was. OK? Now what you’ll notice
is, what does it do? It breaks out all of this
horizontal resistance. Now, remember, if the price
is touching like it did here, like it did here, like it
did here, like it did here, like it did here– what is that really saying? What that is really saying is
you’re at an all time high, probably, or you had a
recent short term high. Now, an investor
might look at this. They might say, James,
it’s really going to– broke horizontal
resistance made a high? Could that be maybe
something that might bounce off the 1560 area? Or could it bounce off,
potentially, maybe 1558? That’s the idea. It breaks up through resistance,
makes a high, pulls back, and that might be a bounce
type of setup of what we call CAHOLD, close above the
high of the low day. So what I’m trying
to show you is, whether we look at
this on a daily chart or whether we look
on the interday, we’re looking at
like the same thing. Technical analysis,
technical analysis, whether you look at weekly
charts, daily charts, or interday charts. Do you have to look
at interday charts? No, I’m just showing
you what it looks like. Now are there any questions
of what we talked about? Now, if there’s– let me know if
there’s any questions on that. And what I’m going to do
is I’m going to go back, and I’m going to
take a look at– and I’m just going
to see if there’s any questions pertaining
to what we talked about. I just want to verify. And I know there’s a
slight pause there, so I’m going to go back and
see if there’s any questions. Now, when we talk about other
examples of these stocks– and I’m going to kind of
show some examples here of some NASDAQ stocks. So examples that would
actually– also, Dollar Tree, I’m going to switch a
little bit to retail here. When we look at examples
of, let’s say, Dollar Tree, you’re going to
see that there– it doesn’t have to be every stock
that is at a brand new high. Dollar Tree is an
example of something that had a moving average
crossover and an example of hitting a 20 day high. Again, we can visually
see on the chart, where was that first
touch right there. Today would really
be the second touch. Now, I’m going to choose
the example of Dollar Tree. We’ve seen as of
lately Target, Walmart, some of these lower
cost retailers, they’ve had some
price appreciation. What I’m going to look
to do in this example is I’m going to go back. And I’m going to kind of
use, maybe, that area. Let’s say, maybe, the area,
and I’ll draw two lines. That area of, let’s
say, 9977, another area might be, let’s say, 9790. I’m marking two of
those spots because I know that everyone’s not
going to probably set the exact same stops. You might set at
tighter or looser. What I’m going to look
to do in this case is, what type of candle was this? That’s not– that’s
an inside day. When we talk about inside days,
we normally talk about harami. That’s quite a large harami. if we look at, let’s say,
the candle from yesterday, that’s a hammer candle. And when we take a
look at, let’s say, this today, what you’ll
notice is that’s a gap. Now, I’ve watch some
interday charts. And it’s funny how these
candle patterns or these basing patterns are the
exact same thing we talk about in daily charts. I just think that’s interesting. And so if you look
at this, we’re going to look to actually
show a bullish example. We’re going to right
click on the chart, drop down to where it
says “By Custom.” And I’m going to go
with OCO bracket, here. Now what we do with
OCO bracket, what I’m going to do in
this case is I’m going to use this old
resistance, which is really about 113ish. I’m going to really use that
as a potential area where the stock might
try to go up two. Think of that as
the target area. Where are we looking
for the stock to go to? If we change that day to
GTC, OK, stop underneath. Now if you said, James, I want
to use that lower area, 97, let’s kind of mark that. 9790, OK? So let’s type that in,
9790, last 2% to 3%. And it’s really going to
give us a stop of 9594. So let’s go for it. So it’s saying, if we buy
the stock, if we get filled, the target becomes valid,
and also the stop is actually valid. And it’s saying, if we go to
that price or less, trigger the order to be filled,
which could be less. That’s how the stop works. If we go data GTC,
remember, that stop is a market order,
which means it’s not specifying exactly what price
we’re going to get filled at. Be aware of that. Now if we take a look at this. I’m going to go over here. I’m going to change it
to “Confirm and Send.” Here’s the capital
that’s involved and the transaction
fee to buy the stock. We’re not going to
have two sell orders. We’re either going
to hit the target, or we’re actually
going to hit the stop. OK? So that’s why there’s a
credit here, two of those, because it doesn’t
know if you’re going to hit the target or the stop. And then there’s the
buying power involved, which is really the actual– where we’re actually
out laying the capital to buy the stock itself. Now if I go ahead and go say,
let’s say, send that order, now what I’m going to
do is click on Send and that order is going
to sit right there. Now the nice thing
about using the charts is we can also see
right here where is the order to buy the stock. Well, it’s at 10477. if we look at, let’s say,
up top, what you’ll notice is that price is
about $0.05 higher than where we are currently. We can wait a couple seconds
or two to three minutes to maybe see if that
order fills or all day. But if it doesn’t fill, you
might go in and maybe adjust the order. Or what we could do is we could
left click and kind of drag it up a little bit. And if we kind of move the
price around just slightly and moved it just
closer to where we are, what we could do in
this case is we could go ahead and we could actually,
we could buy that. Now, I’m just
moving up the price. So if we go send that order,
there it is right there. Now, if we come
back and take a look at this– let’s
look at another one. So when we talk about
examples of finding them, do you think if you
had a market watch that would show you those– let’s bring that back up. So if you said,
James, why do you keep telling me about Twitter? OK, why does every instructor
tell me about Twitter? Well, what you’re going
to see is right there when we put these in,
anything that shows a one with a yellow
background it says it’s meeting the criteria. Anything that actually has a
white background, zero, no. It does not meet the criteria. Please listen to me on this,
if you want to change it to 10 or 15 please do so. If you hate the 55,
please change it. I’m using those two time
frames as a template. But I showed you how you
can easily change those. So whether we want
now stocks today that met that criteria risk,
Pepsi, Excel, Comcast, Micron, Mondelez, KLAC. I think we heard
of that one before. There’s a map, there’s WDC. There’s Lam Research, LRCX, I
think we talked about that one as well. So I want to kind of show you,
when we talk about setups, we talked about them in terms
of bullish bounces or breakouts. Well, one way to get a break
out would be a shorter term breakout. Or another one might be
a longer term breakout. And I’m just showing you that. So feel free that you
might take a look at this and look at some of those
comments I mentioned. And, again, when we
talk about the stocks where they meet the
criteria, it does not imply that the stock
is going to go up. It’s just saying it
meets that criteria. Now one thing we want to
actually also mention, coming up at the top of
the hour, [INAUDIBLE] will be doing a class
on trading verticals. He’s a phenomenal instructor,
very good at that topic. He’s very well– knows
a lot about scripting. He’s, actually,
one of the probably talk to people of
scripting in general. Scripting is another way
of just doing searching. Scripting is really
just constantly a search that’s constantly streaming. John McNichol is
very good at that. Also coming up after John’s
class on trading verticals, I’ll come back and talk about
directional option strategies. And so our learning outcome,
what we want to do here today was the following. We wanted to be able
to find breakouts. What I talked about is how
can we use the marketwatch to find them? We showed that. Second, how do we actually
find them on the chart, put them on the chart,
and be able to see those? And we did that. And so the two trade examples
that we did here today was, let’s kind of see. We did Dollar Tree, and
we also did the example of WDC, right there, WDC. We showed an example of a
futures paper money trade, right there, MGC, which
is the microfutures.. And then also we did the example
of, let’s say, Dollar Tree. Those are the three
examples we did here. So stay tuned for John
McNichol coming up right at the top of the hour. Also, I’m trying to also make
sure you know about Twitter and what we talk about,
like, what’s on Twitter. What are some examples? We’ve shown, maybe, what some
investors could be looking at or might be looking at. Maybe talk about some
principles and practices, technical analysis, fundamental
analysis, market, et cetera. And so that’s what instructors
were trying to say, that you can connect with
us also on Twitter as well. So with that said, thank you
so much for your comments and your participation. I also want to give
a quick reminder that when we talked about
examples here today, remember that in
order to demonstrate the function of the platform,
we did use actual symbols. Remember that TD Ameritrade does
not make any recommendations determinings to the ability
of any security or strategy. That is up for you to decide. Be aware of the
characteristics to risk of standardized
options, and also be aware if you trade futures, no
of the risk of those as well. With that said,
thank you so much for your comments and
your participation. Stay tuned for John
McNichol coming up right at the top of the hour. Take care. Bye bye.

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