Wyckoff trading method, page-1350

Hi Jayza1988

I decided to use my chart as I thought it might give you a different lense to look at the stock through.

Certainly made a solid start identifying some key and important resistance and support areas. This is a crucial skill and from that chart you posted, looks pretty good, so nice one. If those areas are not clearly marked out, then it makes it difficult to progress through to the next stages. So you are def off to a good start. Now it is time to kick it into another gear ie one or two levels up.

Personally before I look at the recent action of the various market participants on any chart, I think it is also important to take a brief Birds eye view to see for any previous hints that were left behind on the chart, that we might be able to use now ie previous zones of resistance and support. Note the word zone. Too many people see Resistance as a single price itself. This is incorrect imo. So look to the left of the chart and make some observations about these previous zones. Some TA traders even add these previous zones into their Trading Plans

Back in Oct 2015, PLH jumped over 100% in two weeks, see grey arrow. I think that price action surprised most players and all of a sudden the message would have been sent downstairs to their “Analysts” to quickly revise their price targets. This is what can potentially happen when Instos in particular are caught out, missing on the early action. A “revised forecast is issued” when they get it wrong. However all traders have their own bias which can effect their judgement re price, even Analysts. The traders that make it, are the ones that get it wrong BUT cut their losses straight away and move their monies onto the next potential play. It is also a matter of keeping our trading account, rather than drawdowns, which can have a potentially damaging effect on the Trader.

Probably a little profit taking week see light blue arrow.Yellow arrow see the 4 week period around it, there was no supply basically. So it was a low volume failed selloff.However note that last week before the massive volume spike. I would say it was one attempt in the accumulation phase to trigger any stops, and pick up any cheap shares, which they did. Notice the length of the bar and how it closed just off the high of the week. This was an accumulation signal, but the liquidity was not that large. This can be a problem with penny stocks. If your position size is too big, you risk everything. Never break this rule. Position size is set and forget in 90% of occassions for at least a fair chunk of the ride. The markets have a habit of letting you know if your analysis is correct reasonably quickly.

Massive Accumulation Phase backed by major Volume. Once that Buying Climax was done, the sellers gained control and sold it down hard as they overwhelmed buyers with their profit-taking. Now take a good look at my chart and notice the pink horizontal lines. To me this is the key support zone. As long as price can consolidate in this region then I probably wouldnt be too concerned. If it was to breach it, then it is real confirmation that the markdown was already in place.

The last 4 weeks of volume are low. Now sometimes this can mean a couple of things. Many people automatically look at low volume as no interest. However it is a tool that is used by Accumulators to put "Other" candidates off their scent. So just keep an open mind, but imo low volume usually means lack of interest at the current price levels from buyers. See below.

  

Just remember there are Four Market Phases:

1.Accumulation
2. Mark Up
3. Distribution
4. Mark Down

Hope this helps
Cheers
GF
(PS I am still learning and are loving the journey. Some are quicker to pick things up, unfortunately for me I am in the slower camp but I dont care. What is most important to me is to get each stage understood and the foundations of Wyckoff sunk into my skull). So take it easy, read, ask, question. You will get there if you want it badly enough.