ISM Communications Corporation (ISM) closed on Monday at 5.77, up by 14.03 percent. I don’t bother checking company disclosures or news that made ISM gap up and breakout above the mid-term resistance at 5.21. I’m just purely technical when it comes to trading. It’s all factored in on the chart for me.
My buy signal from my 10SMA-MACD combo came out last April 11, 2019. That was the day when MACD crossed above the signal line and the price went above the 10SMA. Because the price was still moving above my trailing stop loss, it prevented me from getting wiped out too early in the game.
Although I did not factor in the sentiment of the foreign investors in my buying decision, I just want to share with you that foreign investors remain bearish for 2019 YTD on ISM.
Trade-Volume Distribution Analysis
Most Traded Prices: 5.8, 6, 5.9, 5.77, 5.85
Most Voluminous Prices: 6, 5.9, 5.8, 5.85, 5.77
Even though ISM gapped up today, know that the most traded and most voluminous range is closer to the intraday low than the intraday high. That’s an intraday bearish signal for me.
Besides, ISM closed below its Volume Weighted Average Price (VWAP) of 5.83 already. That’s another indication of an intraday bearish sentiment.
If you also bought ISM last April 11 and applied 5% risk tolerance, your trailing stop loss would have already been hit when the price dropped to 6.02. That’s not bad if you entered between 5.10 and 5.22 on April 11 and sold near 6.00 on the 11th day. You bagged more or less 13% of gains exclusive of taxes and fees.
The support of ISM is now near 5.21 while the resistance is near 7.36. If it breaks below 5.21, that’ll make 4.51 as its near support level.
I am now bearish on ISM. It’s not just because my trailing stop loss was already hit and I already exited but because of my data-driven observation also which I already stated above.
If you still have ISM, please make sure that it’s trading above your trailing stop loss. Otherwise, you’re only risking more than what you can only handle. If the concept of using a trailing stop loss is new to you and you’ve accustomed yourself to using a target selling price, please watch this video.
If you don’t have ISM, please avoid the fear of missing out (FOMO). Re-evaluate ISM as soon as you see a green candlestick on Tuesday. Here are the four criteria that I check before I decide to do a test-buy.
– the last candlestick is green
– the last price is above the VWAP
– volume is at least above 50% of the stock’s 10-day volume average
– the most traded and most voluminous range is closer to the intraday high than the intraday low
If you’re going to check the presence of these 4 criteria within the first 30 minutes of trading, you can’t always expect criterion # 3 to be present. In that case, you may ignore criterion # 3. But if you’re re-evaluating around 11am already, all 4 criteria must be present for you to have a data-driven conviction to do a test-buy.
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Please comment below if you find this helpful. Please let me know which part of my analysis did you find helpful the most.
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