Thursday, August 30, 2007

Formula Pivot Points - JA Solar Holdings Co., Ltd. (ADR) (Public, NASDAQ:JASO)

A few readers have asked about JASO so I'm going to review pivot points using JASO as an example and then I'll go over one that I traded today - CSCO. The first chart is a 15 min. wide range view of JASO. The green lines are visual PPs that I use to guide my trading. My definition of a PP is a price point where price pivots and changes direction - several pivots at the same price level create a significant PP.

The second chart of JASO is a 5 min. timeframe with my PPs (green lines) and the daily PPs from Esignal (right click on chart and select Formulas, then select Pivots, then select PivotPointAll.efs). I've highlighted these on the chart as P, R1 and R2. The key is to see how price reacts to the different PPs on the chart. In JASO's case, it observed P as support in the OR. The ideal entry would have been B&B with yesterday's late day highs. If that entry was missed, a second entry could have been taken after P1 was tested as support. I would not have entered long beyond that point, because price was already extended after yesterday's momo move. Also, the three WRBs from the second arrow to R2 need to consolidate. Any entry beyond that level needs close management in order to avoid a sudden reversal.




The last chart is my CSCO trade today. I missed the perfect entry at the lower blue arrow, so I waited until price had taken out the next PP level. I like the way the Esignal PPs are a very close match to my own on this chart. Because of the late entry, I let it ride and waited till it carved out a lower high to exit my position.

Next week I'm going to incorporate the Esignal PPs into my trading to see if I can generate a few more trades in my trading day - small moves between the Ps and Rs/Ss.

6 comments:

Jerry said...

This is the same intraday PP I am using now. Work great!.

Remember to put this in your "Intro to WSW Blog"

Jamie said...

Will do Jerry!

Closet Daytrader said...

Jamie,

When you trade these Pivot Points, how much does Volume plays a factor? I understand that the stock has to have some volume to get it going. But as the prices crossed these PPs, does a significant dip/rise in volume (or even the lack of) plays a factor in your decision to enter the trade?

Thanks,

Jamie said...

CDt,

Volume is important in all my trades.
A great setup can easily fail if volume doesn't follow. Of course, these past few weeks, volume in the markets has been below average so I take that into consideration as well.

Anonymous said...

Hello Jamie,

Excellent work on the pivots.
Thank you!

Jamie said...

Welcome Anon.