TNA 01/27/2012

TNA is running the channel nicely. It has touched the bottom several times, offering a new, low-risk entry point--and validating the channel itself. Again, the channel is a linear regression line with offset parallel lines 2 standard deviations distant.

Note, too, these lower channel line touches come when price encounters the prior resistance levels (horizontal red lines). It has now broken through the final resistance level and is free to climb to the next up around 61, which is also the target determined by the Measure Rule (green lines).

The two straight blue lines are trendlines which the price honored as it passed through, then retested before resuming its climb. The final retest also coincided with a narrowing of the Bollinger Bands, which indicates a calm before the storm. It subsequently gaped up, then retested the major resistance level it had previous attempted to break through several times.

Not shown on this graph is the observation that TNA makes its daily low sometime between 0930 and 1030 each day, including the days it tagged the lower channel lines. I can stay and watch, or enter a buy order that the lower channel price, thereby not missing morning designer coffee. If I were day trading, I could buy each morning, then sell the tops later in the day, giving me a point or two every day. A point here is 2%, so it becomes a nice profit after several days.

For swing trading, the retest of the trendline was at 45 and it closed today over 55 in fourteen trading days. That's over 20% in three weeks, or $1000 per 100 shares. Not bad; not bad at all.

And it is still running. When it goes into correction, I can flip over and trade its mirror, TZA. That is the bear version of TNA.

The package this is taken from is StrategyDesk, which is free from TDAmeriTrade when you have an account with them. They have a newer package, ThinkOrSwim, also free, but I've learned this one and my brother never convinced me to switch.

I have tried to describe this trade in a manner that you can keep as notes. It seems simple to do, and takes little time each day since one can use limit orders. I don't have to stick around and watch it--which drives me nuts. Hopefully you will find this helpful, and it does help me by explaining it.