Hi james, it is the 130 SMA im calling the Blue Line, it is colored blue sa COL [CitiSec Online] charting, hence the name. I have not found any books or article mentioning about it. It was from observation that I noticed everytime price pierced through that SMA, acceleration of price movement follows (increase or decrease).
It all started when I was looking for a filter for [William’s] %R indicator at the same time I was reading articles on Turtle Trading, tried several SMAs on different issues then I noticed the blue line of COL, my first issue was DMC.
DMC – Imagine if I have found this earlier, i would have entered DMC on the first breakout sa blue line @ 3.0 then stayed long using the blue line as my stop, i would exit @ the 2nd circle @ 9 when the price went down below the blue line, I could have entered again after it went up above the blue line again and stayed long up to this point.
I also use the blue line for volatile, basura and short term trading as an entry point but seldom as an exit point because of the volatility, I used other indicators in exiting.
I first applied it to APC, and have applied it for 3 times na, im monitoring and waiting for a fourth entry now in APC
WEB, ISM, MEG, PCOR, ORE
Recent stock na ginamitan ko ng blue line entry are VITA, BSC, EVER and WPI.
There were false signals specially those that breaks above blue na walang volume, one thing also na dapat tandaan is wait for the close bago pumasok, there are several false breakout na di nasusustain hanggang close.
Check mo sa ibang issues, check mo historical, blues, 2nd liners, basuras, you will be amazed, it is not 100% sure but I’m comfortable working with it, I’m happy sharing this to all 😉
~ maverick_sean, The Maverick’s What’s Hot and What’s Not!! Thread of http://www.P6Traders.com
Harmonic Feature: The Thin Blue line (130-day Moving Average)