With 2 weeks of trading left for the PM stocks in our, PM Stock Trades Portfolio for the month of October, let’s look at how they have been holding up during this recent 12 week consolidation period. I’m going to focus on the weekly and monthly charts because I’m trading the intermediate term which can generally last from 6 months to a year or longer which I believe is where the big money is going to be made. If you are a short term trader then this post is irrelevant to you

How do you know when you are in a strong impulse move up? As long as the 30 week ema or the 12 month sma holds support over many months the odds are very high that you are in an impulse move. These 2 moving averages can be whipsawed many times during the consolation phase which is a good clue the stock you are trading is still consolidating and hasn’t begun its breakout move yet.

I don’t want to sound contrite but trading an impulse move is so much easier that living through or trading a consolidation phase which is meant to shake you out of your positions. There can be some big volatility during a trading range which leads nowhere either up or down but it can have a negative affect on your psychological behavior that you might not even be aware of it. Volume generally tapers off toward the end of a consolation pattern but there can be big spikes and area gaps that also can give you a clue that the trading range is still under construction.

The main thing that makes me so bullish for the long term is because of the 2016 trading ranges that have built out on most of the PM stocks and PM stock indexes. Even after a very strong 7 month rally many of the PM stocks are still in the breaking out and backtesting phase and haven’t even begun their breakout move. This speaks of longevity and not a flash in the pan type of move. I’ve said this 100 times before, the hardest thing to do during a strong impulse move is to do, NOTHING, especially if a consolation pattern takes longer to complete than one thinks it should.

I’m going to go down the list of most of our trades in the PM Stock Trades Portfolio using the weekly and monthly charts. The weekly charts show where we got in with the use of the 30 week ema for the sell/stop which has kept up in the trade as long as it is not violated. The long term monthly chart shows you the big picture and what the PM stock has done for the month up until last Friday. I will be updating all the portfolios at the end of the month as I’ve been doing since we began this current PM stock portfolio.

These charts to follow are pretty self explanatory so I won’t spend a lot of time discussing them. Just take note of the breakout and backtest to the top rail of the 2016 trading range and where the price action is relative to the 30 week ema. You can also look to the upper right hand corner for what the stock has done so far for the month of October and where it is trading relative to its 21 month sma.

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