All posts by Sami Abusaad
Don’t Fall Asleep in a Boring Market
The market is still boring as it continues to grind up, but Sami warns you should not stop paying attention. When does he think the market will start making major moves? In this video, Sami explains: – How resistance in AAPL plays a part in upcoming trades – Why EVBG isn’t a good swing play – Where the target for OPEN will be – Which stock he hopes will have good future earnings plays – What he likes about the UGRO chart
Continue Reading -->Webinar Replay: Power Swing Trading With Gaps
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Continue Reading -->Why I’ve Given Up
QQQ is starting to look weak and might be due for a pullback. But Sami’s given up on trying to predict the top. What signal is he looking for that will tell him when the market has finally reached a top? In this video, Sami explains: – Why he doesn’t think the market is interesting – What will make him like BIIB even more – His thoughts on Bitcoin-related names – Why he would pick MARA over RIOT – Which sectors are performing even better than COVID-related names
Continue Reading -->The QQQ Focal Point
The market is continuing to be bullish this week, but Sami has a specific price point that he’s watching to determine if the market will pivot or not. Find out what his focal point is and what he’s expecting to happen. In this video, Sami explains: – What AMZN shows about the bullishness of the market – How to recognize a 1-2-3-4 pattern in ALKS – Which name he’s watching for a possible breakout – The all-star play that he’s returning to – Where he’s placing a target for KYMR
Continue Reading -->Waiting on a Drop
The market is looking pretty bullish this week, but it’s been up for four days. Sami has a lot of bearish names that he’s watching and will tell you what could signal a big drop soon. When to start looking for a reversal in QQQ Why he’d bet CTAS‘ recent bottom won’t get taken out anytime soon What he’s looking for in MGI His biggest regret trading PRTA
Continue Reading -->Yes, Amazon Is STILL One to Watch
This week’s watchlist is here! Jump in and find out: What you need to see now on the daily chart Why the trend is probably here to stay What makes Amazon (AMZN) stand out so much The bio name that is on fire The 3 names that can drop And more!
Continue Reading -->Amazon Is on Breakout Watch
This week’s watchlist video is here! Jump in and find out: The issue with IWM (even though it’s bullish) Why Amazon (AMZN) could break out soon Why the market is all-out bullish Where money could rotate The pharma name which could skyrocket And more!
Continue Reading -->I’m Bullish… but I Have Issues
This week’s watchlist video is here! Jump in and find out: Why Sami’s bullish, even with the risk of a pullback Why AAPL and MSFT are important The reason SNAP looks good Why BIIB could get hit
Continue Reading -->50/50 Bias
Typically Sami talks about his bias for the upcoming week, but this week will be tough to determine. Find out what is making his decision so difficult and how that influences his other trade ideas. In this video, Sami explains: – One of the two scenarios that leads to a choppy trading environment – Why you can’t short some gold stocks – How trading ADVM will look similar to GRAY – Where to find a transition A play in AKBA – The signal that tells you when to jump into a stock
Continue Reading -->How to Use the 20 and 200 Day Moving Averages
If you hate Moving Averages, odds are you don’t know how to use them. Combined with knowledge of price-action, they are an invaluable tool. In this article, I’ll show you how to harness the power of the 20 and 200 Day Moving Averages. What Is a Moving Average? A moving average is a stock’s average price over a certain time period. That time period can be anything from minutes to days to weeks to months to quarters to even years. A daily moving average is the average of a stock’s daily closing prices over a specified number of days. How Is the 20 Day Moving Average Calculated? The 20 day moving average is the average closing price of a stock, ETF, or other asset over the last 20 days. Each day it changes because the oldest closing price gets removed, and the newest one is added. That’s how simple moving averages are calculated. Exponential moving averages use a formula to give a greater weight to recent prices, which is beyond the scope of this article. How Does the 20 Day Moving Average Help Us Trade? Moving Averages are directional guides that speed up the technical analysis of trends. If the moving average is pointing up, you know the stock is bullish. If it’s pointing down, you know the stock is bearish. They are superior tools in uptrends and downtrends, and their importance in sideways trends is greatly minimized. In this article, I’ll show you how to use them with sideways trends. When using moving averages, the color should be consistent across multiple timeframes. The type of moving average doesn’t matter, but it should be the same on all time frames. How to use the 20 Day Moving Average The 20 day moving average is one of my powerful tools. When Stocks are about to transition up, the 20 day Moving Average with start to hug price and curve up. That is your indication that the stock is about tot transition. So, even if the trend is sideways, keeping an eye on the moving average will tell you when the sideways trend is breaking. In these examples, the moving averages alert you to the higher-low, which indicates that the stock is about to breakout. I call this “the halt”: when the stock stops criss-crossing the MA and begins to respect it. The MA applies to every timeframe the same way. The only exception is the daily, which has gaps. While the moving average is going through price, don’t touch the stock. When it starts to point up, it’s indicating that the stock is going higher. What Does the Direction of the 20 Day Moving Average Mean? A rising 20 Day Moving Average represents positive market action or strength. A falling 20 Day Moving Average represents negative market action or weakness. During a strong uptrend, retractments tend to halt at or near the rising 20 day Moving Average. During a strong downtrend, rallies tend to halt at or near the declining 20 Day Moving Average. Following penetrations of the 20 Day Moving Average, pullbacks to the broken 20MA become very likely. In this example, we see the stock bouncing off of the 20MA on the uptrend. When the retracement breaks the 20, the next several retracements also break it. The 20MA is no longer relevant as the stock goes sideways. This is anindication that the trend is over. What does the Slope or Angle of the 20 Day Moving Average mean? The slope or angle of the 20MA is indicative of the strength or weakness of the underlying stock! A 45 degree angle is ideal. Steeper than 45 indicates that the trend is not sustainable and will soon run out of fuel. Shallower than 45 degrees indicates that the stock is weak and lacks momentum. Here is an example of an ideal Rising 20MA slope. Here is an example of an ideal Declining 20MA slope. Here, the MA starts at a 45 degree angle, but becomes steeper (unsustainable), and tops out: How to Play the Trend of the 20 Day Moving Average The odds are much higher in the direction of the MA. The 20MA must be going from bottom left corner to upper right corner (when playing long) Price is at or near the 20ma, not far away from it (not extended) The 20MA is not crisscrossing price The 200MA must be below price, not above it. The correct entry is almost always at/near the rising 20MA or the declining 20MA However, we do not enter because price is near the 20MA. We must have a tradable pattern Other Ways to use the 20 Day Moving Average Expedite the scanning process: For bullish stocks, look for a rising 20 MA. A flat 20 MA indicates the stock is currently momentumless. Determine the stock’s extension: If a stock is tracking just above the MA, the stock is not extended. If the distance between the stock price and 20 MA grows rapidly, the stock becomes extended. Locate support/resistance: In an uptrend, support is almost always found at or near the MA. Determine if there is a price divergence: if a stock price shoots up above the MA while the MA continues at the same rate, the stock will most likely pullback to the 20 MA. Anticipate reversals: when a stock is in an uptrend, price respects the 20 MAs. You can spot reversals before they even happen. Anticipate a rise in volatility: If using two MAs (a faster and slower), cross overs between the two MAs indicate volatility. Calculate risk to reward: when the 20 Day MA is your target, you can calculate the risk Determine Relative Strength to Relative Weakness: If a stock is trading above the 20 MA, it is showing Relative Strength. If it’s trading below the 20 MA, it’s showing Relative Weakness. Now let’s talk about the 200 day moving average. How Is the 200 Day Moving Average Calculated? The 200 day moving average is the average
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