Dynamic Trend Profile

Today in our live class I tried to introduce a style of trading I use occasionally where I find a very good stock that is pulling back in a deeper way that is holding near the 200 moving average. If that stock has trended prior to this deep pullback, and if I can firm up additional supports/resistances, I will attempt an aggressive trade off that key area using the DT Profile system. Let me give you a few examples.

Here is a copy of a recent setup in Us Global Investors (GROW). Notice how it was previously very bullish prior to its several month strong pullback. Notice how it held to the simple and exponential 200 MA on this retracement. It held the November breakout support. It bounced off the 50% retracement pullback number. It was just confirmed as a PB buy this week. The next pullback will form a lower room buy setup that might be easier to get into now for more conservative traders.

Here Baidu.com (BIDU) is bouncing off the 200 MA and should stabilize here enough to establish a bottom during this pullback. If the DT could only provide a PA, PB or PC room buy setup at this time to help guide us in establishing a risk/reward parameter we could consider taking. At this time I would wait for the blue (strength) to accumulate a little more in hopes the next pullback will create a lower-risk DT Profile room buy setup at this point. That would be a safer entry point. So long as this 200 MA holds we have good odds the previous longer-term uptrend will eventually return.

EMC Corp. (EMC) recently retraced in a smooth 38% pullback and held a 200 MA. At this point if EMC can hold on the next pullback between 13.00 to 12.50, odds are good we can see a nice rally back up to the initial breakeven target or higher. Look for a quality future swing room buy setup to help guide any future trade. Then watch for the trend to pick up once it breaks through the better PB room entry. There is currently an asterisk in the PB room trade which suggests we will get a pullback and a better PB room entry.

Here is the NYSE Group (NYX) chart we talked about in our live class with what I think are the correct 200 MA's lining up.... These posts represent the kind of unique trade I like to identify by combining with Dynamic Trend Profile and some basic technical analysis to help guide in the money management aspect of the larger room size setups.