In The Chart Of EBay You Can See Where The Bands Did Just That

Category: Finance.

In part I of this article you read how the Internet E- Commerce industry is one of the better performing industries this year.

Those stocks are eBay( EBAY) , the University of Phoenix Online( UOPX) and Getty Images( GYI) . Within that industry we selected three stocks that have good fundamentals and strong trading patterns. Finding the right stocks to trade is half the battle. Bollinger bands are a critical part of any successful trading system. The other half of the battle is using the right trading system to find the best entries and exits to profit substantially from the price moves of those stocks. The construction of the Bollinger bands is such that you can easily identify when the next big move is beginning.

One part of using Bollinger bands is to take notice when the bands change from being close together to being far apart. You use that signal to enter a position in the direction of the move and stay in the trade until the price graph pattern and indicators signal a reversal. In the chart of eBay you can see where the bands did just that. The bands changed in early April signaling a buying opportunity and would have gotten you in a trade around$ 7Bollinger bands do a great job of indicating when there will be strong moves that will make a lot of money for you. They changed from moving in a narrow range to moving wide apart. EBay is the classic example as it continued to rally to$ 9That is almost a$ 20 profit on the stock.

Notice the bands began moving apart when UOPX was$ 8It wasn t until the stock reached$ 91 that the price graph and other indicators began to weaken and marked the time to take profits. Now let s look at UOPX to see how this one Bollinger band concept could have helped generate some very solid trading gains. The bands also gave the signal there would be enough of a sell off to make money on a bearish trade when UOPX rolled lower. At the end of March the Bollinger bands began moving apart signaling an entry at$ 5The exit was signaled when GYI reached$ 56 and formed a price graph multiple top pattern. That trade was an entry at$ 87 and an exit at$ 7 Using what you ve just learned let s now look at the chart of GYI. May 28th the bands signaled another bullish entry in GYI at$ 5At the date of this writing the stock is still moving strong and you would still be in a bullish trade.

As you do this you will create a watch list of good stocks to trade. Narrow down the universe of stocks that you may trade by finding strong industries as the Internet E- Commerce industry and pick out some of the top stocks from that industry. Then by applying a proven technical analysis system you will be able to profit from those stocks whether they are moving up or down. For more information on how to use technical analysis to generate consistently profitable trades attend one of our free Bollinger bands webshops and the two day Technically Speaking course. Bollinger band studies are just one part of a strong technical analysis system and they should be used in conjunction with price graph patterns and a few other consistent indicators to get the best results. Have a GREAT Day! Markay with BetterTrades

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