Stock Online TraderBulls & Bears Make Money, Pigs Get Slaughtered…Let Us Not Be That Pig…

The stock prices move intra-day based on how the stock plays out at key supports and resistances. These also provide get trade setups. Lets look at 4 such charts to understand how to find them.

WFR  is a classic spike in the morning and fade in the afternoon intra-day chart. When the key supports were broken, this stock gave up more, making it more predictable play. $18.00 and $17.50 pivotal supports were taken out, causing the sellers to keep selling and push the price lower. WFR saw it go from $18.20 to $16.60 and back to $17.20.

OCN had no clear signal in the morning. Infact it kept moving in a smaller range of $11.50 – $11.70.  It did put in double tops for the day, but that was no clear signal to short into. The short signal arrived when OCN broke below the $11.50 support line. It triggered a series of stops pushing the stock to $11.20 in no time.

MWV had no clear signal in the morning. It also traded in a small range from $12.50 – $12.80.  Bulls couldnt take the stock above $12.80 after multiple attempts. This was early signal for bears to short into. However once the $12.50 support was broken on the downside, this provided excellent shorting opportunity.

RT is an interesting intra-day chart that worked perfectly. $2.80 provided support in the morning, from which the bulls pushed the stock to first $3.00 and then $3.12 level. After topping at $3.12 the stock started selling off.  Once the key $3.00 was broken down, the stock fell to $2.80. Once the earlier of $2.80 was taken out too, RT cracked all the way to $2.62.

Whole Foods Market, Inc. (WFMI) owns and operates a chain of natural and organic foods supermarket. As of September 30, 2008, the Company operated 275 stores organized into 11 geographic operating regions, 264 stores in 38 United States of America states and the District of Columbia; six stores in Canada, and five stores in the United Kingdom

There were 4 trading alerts today for WFMI. These were based on breakdown of supports and breakout of resistances. As mentioned in the chart, once key support levels are broken down, the stock keeps moving lower. The rationale behind this is pretty simple. Most traders place their stop loss below key support levels. If these support levels are broken, the stop losses get triggered putting more pressure on the stock. WFMI saw a continous sell-off after the morning spike. After every key support was broken, sellers poured in, taking the stock lower and lower. (Breaking down from $18.20 to $16.80 levels)

Eventually in the last half hour, bulls took control of the stock and broke past the $17.00 on the upside, providing a quick long entry.