Stockradar: Amcor (AMC)
November 26, 2009
Has anyone looked at the Amcor chart recently? The rally from $4.00 to $6.00 has shown us a remarkable change in the demand supply equation for Amcor shares – finally!
After many years of battering by the sellers and a distastefully declining share price Amcor (AMC) is at last ringing the bells of opportunity as utter despair engulfs frustrated shareholders. Put simply a rising price and expanding turnover from recent lows tells of a share price beginning to define up trending behaviour with the chart depiction of fresh demand a key change in the share price behaviour.
If this an opportunity how do we play it?
Now we have valid evidence of a confirmed change in the demand / supply equation we can focus on buying signals.
There have been events lurking in the background that were primed to trigger a change in sentiment and now as we detect price confirmation of that we also have a clear price level at $6.00 where the next challenge for this renewed zest marks a pivot point in AMC’s future. A 30% rally this year still slightly underperforms the general market but it is the largest rally AMC has put in for some time and definitely not the hallmark of a bear rally. If AMC can successfully navigate through this price level at resistance of $6.00, the renewed strength will be further confirmed and paves the way for price to advance again under a new demand controlled environment for the AMC share price. A break through $6.00 has the potential to catch other traders and investors eyes and then the old “fear of missing out” syndrome is one of the many driving forces that will attract new buyers like bees to a honey pot propelling AMC on the next leg of its up trending phase. I like AMC because at this stage no-one else seems very interested in it, apart from a few! This is typical of the early stage of a new uptrend.
From the desperation stage AMC will have very few sellers left leaving the common affliction of a bottom; a scarcity of sellers and the potential for a whole new wave of fresh buying. This doesn’t happen overnight this inevitably changes over time and has in fact been building clearly since the lows at $4.00 were hit earlier this year it’s just that a lot of investors don’t believe it yet. This is another common psychological state attached to a budding trend. As the rally develops its “soul” we bide our time, watch the reversal of fortunes develop, and once we have enough evidence and confirmation we then zero in on the opportunities as the market presents them to us and jump on them with the odds of a continuing rising price is firmly on our side.
Confirmation comes from having put together the appropriate evidence that supports a reversal based on our preset TradePlan criteria, which is primarily based on price / volume action. I then focus on the levels that are likely to trigger upward price movement – my primary focus – and this comes from 4 simple predefined entry signals. A New High above $6.00 for this trending move, up from $4.00, is one of them. So as I stand neutral on the stock now resistance at $6.00 stands out like a blinking beacon of resistance for me to focus on as a trigger for a market imbalance and an upward move in price.
Where to?
Resistance at $7.20 offers the next challenge and we assess price and its behaviour when we arrive there rather than prognosticating on targets and this process goes on for each step higher until our Stop Loss, which follows closely behind the rising price, is hit.
How do I manage the trade?
Every week (I am a weekly trader only) I assess Fridays close against the last Fridays close and from there I calculate the Trend Intensity rating which is Stockradars unique trend measuring tool that assesses a trend state from a weighted basket of four indicators and rates a stock between 10 and -10.
The four indicators used:
1. Price action = Trend
2. Price/Volume association = investor participation/non participation
3. Moving Average = averaging probabilities
4. Price Momentum (MACD) = the power of the crowd behaviour
Movement in the Trend Intensity indicator offers a guide as to the strength and compelling nature of a trend and if this indicator sinks to a rating of 3 out of 10 or lower the stock is disqualified under the auspices of a weakening demand profile. The indicator is an added filter used to confirm buy signals and the violation of stop loss levels – sell signals. This also directs my stop loss setting which are bound by the rules of being a maximum of 5-10% away from last Fridays close and it is never moved backwards – ever!
That provides absolute safety for each trade and is how I manage them but a longer term prevailing weekly up trend can be made up of many uptrend trade opportunities and that makes up the complete Stockradar trading strategy which can be viewed at Stockradar under About Us and How We Work menu items on the home page.
Suffice to say when one trade finishes that is the past, and it is put in the past, then we can clearly focus on new entry signals devoid of recency or anchor bias, be it on AMC, or any other stock.
Stockradar’s trading support provides:
In addition to our new Stock Picks each week Stockradar monitors on a weekly basis the status of all the stocks in our stock pool including our 5 smaller portfolios of 20 stocks, with the release of Sundays Stock Pick and Trend Intensity Report. This report updates entry levels, stop loss levels, any relevant comments, and an updated Trend Intensity rating (TIR) is calculated for each stock. Stockradars TIR is used as a confirmation filter for price signals and assesses the trending attributes of a stock based on four simple sentiment measuring tools; trend, volume, moving average, and price momentum indication.
A bull market propels our knowledge and understanding of the stock market to expert status and then a bear market highlights swiftly the reality of that misconception. The sermon of a bear market is that we should always be learning to trade to make money, not become stock pickers, which are two entirely different things! We should never become too greedy or fearful of the market because that is where the big opportunities lie. Learn to gain perspective so you can sell greed and buy fear and don’t ever make the same mistakes again. Seems simple but we all need a little help and guidance getting there. Stockradar is here to help.
Once you have accepted the reality of the fact there are no guarantees on the stock market and that in fact you or the experts don’t know what’s going to happen next we become free of the heavy weight of expectations and can more capably move forward in developing a profitable stock market trading strategy.
After many years of battering by the sellers and a distastefully declining share price Amcor (AMC) is at last ringing the bells of opportunity as utter despair engulfs frustrated shareholders. Put simply a rising price and expanding turnover from recent lows tells of a share price beginning to define up trending behaviour with the chart depiction of fresh demand a key change in the share price behaviour.
If this an opportunity how do we play it?
Now we have valid evidence of a confirmed change in the demand / supply equation we can focus on buying signals.
There have been events lurking in the background that were primed to trigger a change in sentiment and now as we detect price confirmation of that we also have a clear price level at $6.00 where the next challenge for this renewed zest marks a pivot point in AMC’s future. A 30% rally this year still slightly underperforms the general market but it is the largest rally AMC has put in for some time and definitely not the hallmark of a bear rally. If AMC can successfully navigate through this price level at resistance of $6.00, the renewed strength will be further confirmed and paves the way for price to advance again under a new demand controlled environment for the AMC share price. A break through $6.00 has the potential to catch other traders and investors eyes and then the old “fear of missing out” syndrome is one of the many driving forces that will attract new buyers like bees to a honey pot propelling AMC on the next leg of its up trending phase. I like AMC because at this stage no-one else seems very interested in it, apart from a few! This is typical of the early stage of a new uptrend.
From the desperation stage AMC will have very few sellers left leaving the common affliction of a bottom; a scarcity of sellers and the potential for a whole new wave of fresh buying. This doesn’t happen overnight this inevitably changes over time and has in fact been building clearly since the lows at $4.00 were hit earlier this year it’s just that a lot of investors don’t believe it yet. This is another common psychological state attached to a budding trend. As the rally develops its “soul” we bide our time, watch the reversal of fortunes develop, and once we have enough evidence and confirmation we then zero in on the opportunities as the market presents them to us and jump on them with the odds of a continuing rising price is firmly on our side.
Confirmation comes from having put together the appropriate evidence that supports a reversal based on our preset TradePlan criteria, which is primarily based on price / volume action. I then focus on the levels that are likely to trigger upward price movement – my primary focus – and this comes from 4 simple predefined entry signals. A New High above $6.00 for this trending move, up from $4.00, is one of them. So as I stand neutral on the stock now resistance at $6.00 stands out like a blinking beacon of resistance for me to focus on as a trigger for a market imbalance and an upward move in price.
Where to?
Resistance at $7.20 offers the next challenge and we assess price and its behaviour when we arrive there rather than prognosticating on targets and this process goes on for each step higher until our Stop Loss, which follows closely behind the rising price, is hit.
How do I manage the trade?
Every week (I am a weekly trader only) I assess Fridays close against the last Fridays close and from there I calculate the Trend Intensity rating which is Stockradars unique trend measuring tool that assesses a trend state from a weighted basket of four indicators and rates a stock between 10 and -10.
The four indicators used:
1. Price action = Trend
2. Price/Volume association = investor participation/non participation
3. Moving Average = averaging probabilities
4. Price Momentum (MACD) = the power of the crowd behaviour
Movement in the Trend Intensity indicator offers a guide as to the strength and compelling nature of a trend and if this indicator sinks to a rating of 3 out of 10 or lower the stock is disqualified under the auspices of a weakening demand profile. The indicator is an added filter used to confirm buy signals and the violation of stop loss levels – sell signals. This also directs my stop loss setting which are bound by the rules of being a maximum of 5-10% away from last Fridays close and it is never moved backwards – ever!
That provides absolute safety for each trade and is how I manage them but a longer term prevailing weekly up trend can be made up of many uptrend trade opportunities and that makes up the complete Stockradar trading strategy which can be viewed at Stockradar under About Us and How We Work menu items on the home page.
Suffice to say when one trade finishes that is the past, and it is put in the past, then we can clearly focus on new entry signals devoid of recency or anchor bias, be it on AMC, or any other stock.
Stockradar’s trading support provides:
In addition to our new Stock Picks each week Stockradar monitors on a weekly basis the status of all the stocks in our stock pool including our 5 smaller portfolios of 20 stocks, with the release of Sundays Stock Pick and Trend Intensity Report. This report updates entry levels, stop loss levels, any relevant comments, and an updated Trend Intensity rating (TIR) is calculated for each stock. Stockradars TIR is used as a confirmation filter for price signals and assesses the trending attributes of a stock based on four simple sentiment measuring tools; trend, volume, moving average, and price momentum indication.
A bull market propels our knowledge and understanding of the stock market to expert status and then a bear market highlights swiftly the reality of that misconception. The sermon of a bear market is that we should always be learning to trade to make money, not become stock pickers, which are two entirely different things! We should never become too greedy or fearful of the market because that is where the big opportunities lie. Learn to gain perspective so you can sell greed and buy fear and don’t ever make the same mistakes again. Seems simple but we all need a little help and guidance getting there. Stockradar is here to help.
Once you have accepted the reality of the fact there are no guarantees on the stock market and that in fact you or the experts don’t know what’s going to happen next we become free of the heavy weight of expectations and can more capably move forward in developing a profitable stock market trading strategy.
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