Here’s a fine example of a bullish daily chart only to be stop by the mighty kumo on the Weekly Chart.
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On the daily chart, we see that Chikou Span has break through the kumo and there aren’t any resistant ahead.
But, a closer look at the Weekly Chart, we can see that it hit straight into a fairly thick kumo and there is a high chance that EMC will turn.
Again the kumo suggest that price is stabilizing within a trading range. There is no clear uptrend signal on the Weekly Chart at this moment.
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A reminder to self. Use the Weekly Chart to have a gut feel of how much an ‘uptrend’ on the Daily Chart can rise. Whenever, there is a thick kumo on the Weekly Chart, I will only nibble a little bit of stocks, or use options like IronCondor or Spread positions.Â
The aim is to have a small position to get a more focused feel of the counter without commiting too much. Risk management continues to be the most important area that I need to work on.
