3 WEEKS TIGHT PATTERN

3 weeks tight pattern is defined as three weekly closes of a stock price each within a 1% close of the previous week. A 3 weeks tight pattern and sometimes it could be 4 weeks depending on the overall market indicates the stock is trading at a tight price range on low volume ideally, this action points to institutional support.

If you are new to investing, I want you to read the definition of a 3 weeks tight pattern again and again until you fully memorise and understand it, why? This simple pattern can be the difference between you making or losing money in the stock market when done right by following a few simple rules set out below.

As a new trader you are bombarded with so many trading strategies and techniques that you end up confused and losing money, if all you do was to pick one strategy like a 3 weeks tight Pattern or any strategy that you resonate with you and focus purely on learning, researching, back testing this strategy until you comfortable enough to start trading with it then you are way ahead of 90% of new traders out there that try everything new out there and end up losing money.

Let us look at a recent example of a 3 weeks tight pattern had you been looking out for could have made you a lot of money.

APPLE Inc

Apple went on to move from an entry point of $431.46 (add 10cents to the price of the highest bar within the 3 weeks pattern) to $545.17 where it presently at that is a huge $113.71 move in 6 weeks!

Another example is Visa,Inc

RULES FOR 3 WEEKS TIGHT PATTERN

1. Price must clear the buy point on strong volume before initiating a position, do not buy just because you have seen a 3 week pattern form.


2. Volume on break out must be above 40% above average or greater than the last 6 weeks at least.


3. General market must be in a confirmed uptrend, do not buy if market is in a correction phase.


4. Avoid thinly traded stocks or stocks that trade under 500,000 shares daily.

The markets has had a good run since October last year and many leading stocks are extended beyond their buying range, a 3 week tight pattern offers a secondary entry point for investors, on my watchlist this week are a couple stocks that may fall in this category, such as

Alexion Pharmaceuticals Inc

F5 Network Inc

Charts from finviz.com.

Happy Trading

John O.

Please post comment or questions below

Cloud Computing,The Future

What is Cloud Computing?

Cloud computing enables you to access files and programs on your computer from across a network such as the internet.

Cloud computing is no new technology ,everyone of us at some stage has used some form of cloud computing technology, how be it on a small scale. If you have an e-mail account with a Web-based e-mail service like Hotmail, Yahoo! Mail or Gmail, then you've had some experience with cloud computing. Instead of running an e-mail program on your computer, you log in to a Web e-mail account remotely. The software and storage for your account doesn't exist on your computer -- it's on the service's computer cloud.

icloud a service provided by Apple for it users to transfer information and data automatically between devices such as the iphone and ipad. Amazon Cloud Playerwhich provides easy streaming of your music to any device without having to save them on your hard drive first.

There are many advantages for companies and individuals to use a cloud computing service such as time and cost savings, easy access to applications and data from anywhere and anytime. There are a few concerns such as security and privacy which are being addressed, my view is companies that provide cloud computing services have their reputation to protect so it is very important for them to have reliable security measures in place to keep their clients happy or else they will be out of business.

Read article on how cloud computing works here

As a trader i am more interested in the companies that are major players in the cloud computing field and are growing their business aggressively,by this i mean growing sales over 25% and EPS over 25% quarterly. Two companies have come on my radar and as the overall market is in a correction right now, this an ideal time to look for a secondary entry points that may reveal themselves soon,lets take a closer look at these stocks.

RACKSPACE HOSTING (RAX)

Rackspace Hosting, Inc. provides cloud computing services, managing Web-based IT systems for small and medium-sized businesses, and large enterprises worldwide. Its service offering combines hosting on dedicated hardware and on multi-tenant pools of virtualized hardware in a way that suits each customer's requirements. The company offers dedicated cloud services comprising customer management portal and other management tools for managing the data center, network, hardware devices, and operating system software; and public cloud that provides pooled computing resources delivered on-demand over the Internet to manage a pool of computing resources across a larger base of customers and deliver computing resources to businesses when they need them. It offers cloud servers for computing, and cloud files for storage, as well as cloud applications, such as email, collaboration, and file back-ups; and hybrid hosting that provides hosted computing on dedicated hardware and on pools of shared resources. The company also offers customer support services. It sells its service suite through direct sales teams, third-party channel partners, and online ordering. The company was formerly known as Rackspace.com, Inc. and changed its name to Rackspace Hosting, Inc. in June 2008. Rackspace Hosting, Inc. was founded in 1998 and is headquartered in San Antonio, Texas.

Current Earnings

EPS % Chg (Last Qtr) 80%

Last 3 Qtrs Avg EPS Growth 66%

Annul Earnings

3 Yr EPS Growth Rate 42%

Sales

Sales % Chg (Last Qtr) 32%

3 Yr Sale Growth 24%

Salesforce.com Inc (CRM)

salesforce.com, inc. provides customer and collaboration relationship management (CRM) services to various businesses and industries worldwide. It also offers a technology platform for customers and developers to build and run business applications. The company's Salesforce CRM services enable customers and subscribers to record, store, analyze, share, and act upon business data, and to help businesses manage customer accounts, track sales leads, evaluate marketing campaigns, and provide post-sales service. It markets sales force automation features of its application services under the Sales Cloud brand name; and customer service and support automation features under the Service Cloud brand name. The company also provides various collaboration cloud products, such as Chatter, Chatter Plus, Chatter Mobile, Chatter Free, and Chatter.com that provide a private and secure corporate social network for companies of various sizes. In addition, it markets Force.com, a cloud computing platform under the Custom Cloud brand name that enables customers and developers to build complementary applications; and AppExchange, an online directory that provides customers to browse, test-drive, share, and install applications developed on Force.com platform. Further, the company offers professional services comprising consulting, implementation, and training services. salesforce.com, inc. markets its services primarily through its direct sales, and referral and indirect sales. The company was founded in 1999 and is based in San Francisco, California.

Current Earnings

EPS % Chg (Last Qtr) 39%

Last 3 Qtrs Avg EPS Growth 20%

Annul Earnings

3 Yr EPS Growth Rate 40%

Sales

Sales % Chg (Last Qtr) 38%

3 Yr Sale Growth 28%

Charts and Info courtesy of Finviz.

A few other stocks in this field look promising such as Fusion io, Inc (FIO) which is relatively new but is growing rapidly, the key is to do the research and get in early before the masses.

Happy Trading.

PLEASE RATE AND COMMENT BELOW

PLEASE RATE AND COMMENT BELOW