Where You Can Find High Velocity Moves In This Market

By | TradingMarkets.com | August 16, 2005 12:00 AM
Symbols: MFE, EL, HVT, UHS, KNX

Dave Floyd is a professional FX and stock trader based in Bend, OR and the President of Aspen Trading Group. Dave's approach to FX combines technical and fundamental analysis that results in trades that fall into the swing trading time frame of several hours to several days. For a free trial to Dave Floyd's Daily Forex Alerts .





The high velocity moves that provide
the most best day trades occur almost every day.
But they are not
easy to find by eyeballing charts. If you want to do this, you'll be looking for
the 1 and 5-minute charts are in harmony as defined by the stochastics and a
steep slope of the 20-period ema's etc. And along with that, you'll need to
visually identify fast moves.



Given that High Velocity Trading (HVT) is rarely able to rely upon the same
stocks each day like in the past, it is essential that we quickly know which
ones are moving and meet our minimum criteria. So I use software to as to aid
me. Like I say, you can try doing it by hand. And certainly looking at the
charts in this article, you'll have a good understand of what constitutes a
strong trading candidate. Just keep in mind that you'll need to quickly filter
out stocks that might have solid technical merits, but have little value simply
because they are not moving very much.



Here is some recent HVT action...


The market was under pressure yet again this morning, presumably higher oil
prices were the culprit â€" but frankly the reasons are not important. What was
important was finding stocks that were strong relative to the market and playing
those on any bounces in the S&P futures.



We were alerted early on by our Velocity Indicator that (
KMX | Quote | Chart | News | PowerRating) was strong despite a
gap lower. Once pulled up the 5-minute chart a nice cup and handle pattern was
in the making. A break above $29.20 was likely to provide a great long entry.

























Other stocks that made similar moves and had high ‘Velocity’ readings prior to
the bounce in the S&P’s were, ( EL | Quote | Chart | News | PowerRating), ( UHS | Quote | Chart | News | PowerRating), ( MFE | Quote | Chart | News | PowerRating) and ( ESRX | Quote | Chart | News | PowerRating).



As always, feel free to send me your comments and questions.



Dave



Dave Floyd is President of Aspen Trading Group, which provides research/trade
ideas on the FX and equity markets as well as analytical software. Aspen Trading
Group is based in Bend, OR.


Original publication: August 16, 2005

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