Cool patterns predicting the next big moves for stocks. Off the charts segment is antithet call to my stock picking methods. I know from your feedback on twitt twitter youre interested in this analysis. I devote a whole chapter to charting, i havent become a charter myself if youre studying the physical and mental faculties, research, annuals and sectors and i lay it all out. Charters dont care much about this some of them hate the distraction of knowing much at all about a company for fear would bias them against the stocks chart. Ive become pretty proficient at charting over the years but i still allow on the individual work of professional technicians to demonstrate how to use charting and learn techniques that i could teach you i am picking the best of the best charts of some of the best technicians we was worked with, exploring the patterns so i guess you got to cull me a longterm believer thats why ive started nearly every saturday morning for the last 30 years reading the daily action stock charts formally on paper, now on electronic distribution i go over the Research Available for the most winning of the charts and they become segments on the show you see lair in the week why do the charts work first, you must consider them as if they are foot prints at the scene of a crime these face out what Money Management might be doing with their buying and selling of dollars. These portfolios at large funds often know more than others including you and me the charts of where their money goes, the charts of the stock put together clues that these big boys leave theres a market of selffulfilling nature of stocks so many look at these drawings and take them to heart and they will avoid stocks with terrible charts and fine stocks to own. When i worked with kelly cramer she was an old at my hedge fund she would have me research one with most predictable patterns to get a handle on what might be going on we got some of our best ideas from their chartinspired pran stormy patterns. All of charting tech know analyst start with the pictures of individual stocks but also the internals. Patterns about stocks in the agate, they gave you clues of stock market for years now showed the inherent weakness in the Systemic Risk ive talked about. Theres been skepticism about any chance of stocks reality creates some set of wrists i know many of you fear youre coming in at a level that could turn out to be too late, too high and youll lose money any way. Through Technical Analysis including analyzing the overall mark, more important than ever given that so many stocks are influenced mightily by the tug of the s p stock futures sometimes things that ill luis nate and illuminate conclusion about true mark strength theyre looking for whats known as confirmation of a move to detect its legitimacy. I think confirmations are important to the safety of a move they need to be explained closely. The most important and obvious confirmation, lets say the dow jones average hits a new high. That high will not be sustainable unless the dow jones transportation hits a high the dow jones transportation index is a measure of commerce, tracking trains, planes. If both the transpire and industrial hit new highs i often tell you the move is legitimate and can be trusted and it is real this is some of the oldest Technical Work dating back to paul dow, tcreato of the economists. I like how the trans actions are acting a look at a host of other indicators, the banking index, the housing index, the semiconductor, their stocks, the rth. I like to see all these move up in sink before a bless a mark move for you you get all they had rolling higher, you have to put the maximum amount of chips on the table, oh boy, its the inverse truth. If we get a move up without confirmation from majority of the whole rally can be a steak out. Before the Great Recession youll notice something incredible if you go back and study it there was almost no anticipation upon the financials, retailers or teches. Technical analysis got you out of that mark too late. What are the other internals i look at. I like a market with good breath or a lot of participation by many groups. I look at the new high, new low ratio. This is easy to get on that new high list. First the company must be doing well, the sectors got to be strong toll picks have to be a line to make some good enough to get on that list. That high list is rarefied territory. You have a good stock that want to buy on any pull back thats market related not sub talent to the stock. If there are a lot of stocks so heres the bottom line. You play not be a technician but you need to know what charts are saying and read the internals to verify a real move or a phony one. Well go over a whole host of predictive patterns. Everything we do around here, not just on the offthe chart tuesday but a Stock Selection every single day jim in michigan. Caller i got a question for you. In the segment you were talking about secular stocks, could you define for me once again what is secular stocks and maybe give me an example or two . Certainly this is a very important issue because its a term that gets thrown around, people like secular. Secular means a growth stock that does not need the best product in the world to increase in order for it to be able to beat the number. Some of the classic secular grower stocks would be some of the bio teches, the retailers that have terrific growth. Gary in california caller gary from california, my questions regarding dividends in a down market, sir. Youre accumulating dividends on a number of stocks as you suggest. Is it better to reinvest them in a down market or to take the money as cash and then possibly reinvest that in other opportunities . Well, you see we dont toe when a down face is going to end, we know the power of compounding is an amazing thing. Were going to stick always on this show. Were always going to opt in favor of reinvestments because fortunates have been made into the power of compounding ive got to go with that in the near term consequences because item thinking longterm for you. Tonight ill bring you into the world of master mind charter so you can learn to see the whole picture on stock moves we know its important but what tools can help you detect for fashion. So, why dont you stick with cramer if youd have told me three years ago. That wed be downloading in seconds, what used to take. Minutes. That guests would compliment our wifi. That we could video conference. And do it like that. snaps if youd have told me that i could afford. A gigspeed. A gigspeed network. Its like 20 times faster than what most people have. Id of said. Id of said youre dreaming. Dreaming definitely dreaming. Then again, dreaming is how i got this far. Now more businesses in more places can afford to dream gig. Comcast, building americas largest gigspeed network. Now more businesses in more places can afford to dream gig. What is this . Its the new iphone, its for our anniversary. Our anniversary . Its thirtyfour days since we first met. I didnt. Get you anything. Oh its, its fine cuz. I got myself one too. Oh from you, for me, happy anniversary. I love it. That is very thoughtful of you. Thank you. Get the amazing new iphone 8. And with all at t unlimited plans, get hbo for life. Less than 40 per line for four lines. Only from at t. Throughout history, the one meal when we come together, break bread, share our day and connect as a family. [ bloop, clicking ] and connect, as a family. Just, uh one second voice guy. [ bloop ] huh . Hey . I paused it. Bam, family time. So how is everyone . Find your awesome with xfinity xfi and change the way you wifi. Tonight we are offering the best of the best in Technical Analysis a onestop shop of everything you feed to know to august your envictim. Lets work on something thats been the province of charting on the show whether you pick individual stocks youre betting from the moment you buy them, that theyre going higher i know its a simple concept how often do you do fundamental work on a company and try to figure out whether its the right decision to pull the trigger because your homework is finish then its going to be a terrible time and youre buying oh blifuous to the stock. May homeworks done lets go buy. I say youre being short sided if you dont check out how the stock look technically after you did all that home work i would consider looking at the chart of the stock like as part of the homework, get that in your head. Get it ingrained into your thinking sometime finding bottoms if your long declines can be luke tifr lets go back to the bottom of 2009 i had a sense that decline velocity waslessening. I heard mark cane make his bottom call based on his nate feeling. Doug cast writes with me at money part pro, turned pronouncely positive he was saying we were in a generational bottom. I was still skidish about picking any individual stock to recommend to you i was looking for situations seemed about as bull proof as i can find i came up with at t the phone company. It included a smashing roll out of the apple iphone which is growing record properties. The yield was much higher than just about any stock in the dow, the dividend was backed by cash flow the stock kept plunging every time i did firm fooding. I did my research talking i might buy. No check the chart. I waited and i checked with the chart. I brought in four chartist, amazingly they agreed it was worth considering for an investment they didnt care at all about the fundamentals take a look at this chart. First all four technicians agreed at t has established what has known as a climax low at 21 back in the sue gnaw mee of selling, that was this period. We got to understand we were at one of those moments that was so hideous. See the big lift, the lift in stock. Thats where lots of sellers capitulated. Buyers had started to step up to create a base. Were floored the stock at that level. They arrive to the judgment about looking at where the volume, the sums of all transactions had expanded to an access of norm periods trading thats a sign the sellers had exhausted themselves they had fled the stock by now at the same time buyers step up to meet the supply with the level of demand. There were so many sellers than buyers at each level as long as sellers over buyers with their dumping, bad time to buy. A climax was a decider that the potential sellers who had been holding on for sometime had final given up on mass remember, technicians dont care why that might be the case theyre monitoring price and volume when they see volume gets larger and spans but the stock doesnt go down, that means at last the stock found its force its time to buy, its safe. Thats when buyers have the power the direction of the stock. Thats the base safety thats going to happen when the stock takes out resistance over head to examine the possibilities of a stock the technicians done just look at the closer price and graft the price between the previous day when you close. Thats not helpful because it doesnt yield the true picture technicians use what is known as a moving average to better represent the stock prices movement a moving average by taking the closest price of the stock over a period of time, adding the prices and adding them by the days for example, you can measure moving average over tenday period by adding up ten days of closing prices by dividing the sub by ten each day you add in the new closing, drop off the earl yes, sir price to get the sum of a new tenday period the forces i checked in with taet they used a long view, they selected a 200day moving average. They know at t found a floor at the 21 level that the stock repeatedly bounced off of. It kept failing, meaning it couldnt get through, failing to move up above the 200 day moving average. If they had all plotted it they did the same amount of work, thats what they looked at they created a ceiling, theres nothing they could do. If he felt every time it got there this stock was capped. Then at last, at t cracked through the resistance and that was the moving average that was the signal at t would generate the great trade heres the new floor the 200 day. Every time the average wen above the roof it will create the possibility of the floor then it cam back and test this floor. As they recognized the stock didnt break that newfound base, it didnt go back to where that climax low was, it held. Looking back at the beautiful bottomingwy see here with at t it now seems like child play at that moment it was anything by easy because statement these Technical Analyst were saying the buy was in and it was time to buy the fundamental analysts were scared out of their whits. They were all scared to death. Some worried about pinching alleges that could cause the dividends to be flash. That was way way wrong that base, that floor gave the stock a launching path to blast off and almost Straight Lined into the 30s one of the biggest gains whether you see this kind of reliable patterns at t demonstrating, despite what the fundamental analyst may be saying you have to use the discipline given to pull the trigger and buy after the mark market takes a real after the break ill try to make you more money. At fidelity, trades are now just 4. 95. We cut the price of trades to give investors even more value. And at 4. 95, you can trade with a clear advantage. Fidelity, where smarter investors will always be. Aggressive styling, so you can break away from everyone else. The bold lexus is. Experience amazing. Theextreme risk of burstd a pipes and water damage. Y. Soon, Insurance Companies wont pay for damages. That is, not if they can help prevent damages from happening in the first place. At cognizant, were turning the industry known for processing claims into one focused on prevention with predictive analytics, helping them proactively protect the things that matter most. Get ready, because were helping leading companies see it and see it throughwith digital. Welcome back to our special technical show next crucial themes for technicians, whether stock is over bought and ready for a pull back or oversold and ready for a bounce you determine that by charting the ratio of higher closes, known as a relevant strength and index. Its measure it is direction the stock is going and the velocity of the move. We like the measure the strength of an individual stock to Something Else the strength of its sector or maybe that of a larger index were always looking for anomalies where strength stands out, thats the sign of a pending move perhaps a momentum switch that we wouldnt know if we just read the research on the stock. Turning to bob lange and tim collins that i have done great work on this show. Both lange and collins took two weeks to get a relevant on the stock theyre looking at thats the sign that a break out or break down of some magnitude pay be upon us they love strong situations but they also like to time their buys after pull backs get that better entry point they care about bases. When a stock is overbought its ripe for pull back one for many buyers taking supply, tend to snapback if theyre gotten too far away from the longer term trend line a stock can fall so far, so fast that you should expect a snapback because its technically oversold we see these patterns constantly theyre carters that a change in direction is about to occur. If you were debating buying a stock after youve done all the research and find a stock thats overbought, i usually tell you to wait for a pull back. Lange and collins done enough work to know that the advance and stock shoot directions, and we chase some of the move back to better entry points charting is tricky periodically some stolks are so strong they breakthrough all the ceilings of all traditionals measurement periods and they stay overbought for weeks over time they defy the notion of the inevitably gravitational pull and cant be contained by any of the various sealings that overbought positions usual go into you may have to strap yourself in to get a real moon shot lets take a look at there one we saw out cur in july of 2009 as Dan Fitzpatrick pointed out the summer the stock of Las Vegas Sands, one of the larger Casino Companies one of very important businesses had been repeatedly stalled at the 10 buck level, falling every time it hit boom boom boom,down just not working. But, when the bulls finally broke out there was no stopping them thats a very rare pattern you see this thing, it stayed overbought which told you good thing were going to be ahead it never retreated as you would have expected. Buyers wouldnt quit despite the stock being overbought that is the sign, the strongest kind, a positive move in the book might be taking place at any expected time id expect it to pull back. This stock preceded to go from 10 to 48 pretty much in a Straight Line with no sub substantiative pull back to speak of an overbull condition is a golden opportunity for a move. Remember, i like to mary the fundamentals with the charts so item not too dependant on the pictor rals. What was going on right then, thats what the chief locus of profits from Las Vegas Sands wen to being vegas from mechanical t mccall the clartsz told you about the transformation well ahead of the wall street so there are days we had such a comprehend mcclient to decline to begin with. They werent thinking about mccall here. The chartest thought about volume working they use it to spot pooifts. When theres a small move on volume the technicians ignore it when theres a small move on heavy volume, the chartist drill down to see if its a precursor bigger chartist looking for accumulation on volume, meaning large money getting ready to accumulate stocks if a major way or for dust bu distribution. When the calculation decumulation distribution line is ar caying, treading where a stock closes higher on a greater volume on any different day, verse any low volume i care passionately about it because it can go against the grain of thinking about a stock, thats why i like charts so much we saw them being right in monsanto in 2012 this is an unbelievable one i got wrong. I didnt care for the stock, i didnt like gmos i was biased the while while the stock had down days they were on down fire thats a sure sign more money was flowing into the stock than out of it. Collins did a persistent accumulation or buying pattern versus the distribution, or selling pattern convinced him that the stock was good for longterm. It turns out that what i didnt see, what i was so confused about that monsanto stock had torted to be correlated with the price of corn which was going higher back then i was far too concerned about near term earnings and we are worried about the chart form the work of collins showd is you not to fear. It was showing you something bigger was developing. The stock i would have kept you out of turned out to be a big winner when corn shot out. I got smoked he saw it. Bottom line, we need to look at lots of indicators to spot big moves. Despite important terms that may not be powerful moving can and often elude those who are focused on the jrn lying companies and not the action of the stocks themselves. Dan in illinois. Caller cramer booyah, thank you for demist fieing the market and helping us make it accessible thats what i want. I want everybody to understand their money, thats my goal. How can i help. Caller thank you im wondering if i start with a small position in a stock a company i like, and the stock just keeps going up. The most it comes down is maybe 2, 2 1 2 percent how can i get a more sizable stake my discipline will say you missed it. It will cut off the down side far more important than cutting off the up side. Its a trade and you got to take it i know people dont want to hear that but whether you violate your base and pay up i can show you years and years and years from my travel trust it is almost always a police stake. Charters use indicators to spot big moves much more mad money ahead. Head and slourlds isnt only used for preventing dandruff im telling how it can help you make some money. And techs in the charts. Youre not going to want to miss my take. Got a burning question, im taking your tweets go ahead and treat me jim cramer mad tweets stay with cramer weve learned a lot tonight about the key terms of Technical Analysis lets look at some of the individual charts that many of you fine fascinating, even as some of the patterns, they almost sound silly as if their mimicking letters, or shapes or body parts. Ive learned not to ignore one of the most reliable patterns out there. The dreaded head and shoulders pattern. My travel trust put out coe i like to do mia cup pa in the show something to solid fie when announced splitting into separate companies here take a look at alcoa. The health run for the winner of 2010 right up until february of 2011 rising from 13, up to 17, as its earning seem to turn around. Not long after 17 it took a quick dive back to 15. Then quickly reversed and one back to 17 then wen up to 18 on the eve of the Quarterly Report i thought the quarter when announced was the fine one what worried me was after an initial positive reaction the stock dropped down to 16 and change a few weeks later its back to 17, i feel almost vindicated now ready to go back and take challenge at 18 level, so i went and bought more. I went and bought more right there. Could i have been more wrong i dont think so because that 17 to 15 dive represented on the chart as point a and b, then followed the run to c, 18 back to 16, d. Final 17 e, thats the perfect head and shoulders pattern yeah, just like a humans head that is the most frightening pattern in the short book and ill call and trace it out, just when i thought we were out of the woods. What was happening during that period that the head and shoulder flagged europe and china began their slow down, stunning the growth that was worked so hard to execute. He could control his own company but not the price of commodity itself over the course of the next few years client feld was able to that came after a colleagues of the led and shoulders pattern from a few years before, one that cost the trust a penny. Mea culpa. One of the things i admire is the consistency. At the beginning of january 13, people thought the economy was taking off, investors were running for classic food and drug stocks. And kacaterpillar, and technolo, you know that kind is only the deficit for stock to go higher when its going slower tim collins says, you know what jim, youre going to have to take a hard look at pfizer the worlds largers form suit call company would be a company i would shun if you take a look at this chart, you can see pfizer traded out a left shoulder, rallied through the month of october and started declining aggressively in november. The stock bottomed to form the head december, caught a rally and a pal back to create the right shoulder the key with this pattern is the income lune, the lune that connects the head to the two shoulders. When a stock breaks out above that line it tells the technician youre going to break out a big big big move pfizer line was below 20. 80 given money was powering out of staples and drug stocks headed to industrial i was confounded i didnt trust it one bit. I few it was knew it was a bad stock he was right i was wrong the stock jumped more than 10 after the collins told me to buy it with both hands soon after collins flashed this bullish reverse right here, the huge Truck Company decided to spin off its Animal Health division, it was a shocker into a company. A move that created 15 in value. The chart knew patterns matter, when you see led and shoulders or how confident you maybe in a situation dont take any chances, sell, sell, sell. At least some of it. Whether you see head and shoulders developing, either it makes no sense in which stock it happens to, you got to consider buying some. The trail work on these patterns have been vindicated far more often than the skeptics would think possible stay with cramer ive asked chase sapphire reserve cardmembers to find my next vacation. Uganda, what are you up to . Thats a real silverback gorilla. Im freaking out 3x points on travel and restaurants. Sapphire reserve, from chase. Make more of whats yours. We run the gamut of Technical Training on this show, including technical patterns, head and shoulder set up those patterns not the only chart patterns they can be relied on the tell us the truth when physical and mental faculties fumts dsh fundamentals give us little insight. Take the stock of cramer fade dominos. We got behind the pizza franchise when it traded back to 10 bucks next you know the stocks exhibited some sideways action and began to drift down on no new news im always paranoid to believe something might be happening and i dont know about it and other guys do. When the analysts are iffy and the company isnt talking thats what the technicians are most needed we went to ed and ask for his help to define if dominos moment has come and gone. Heres what he sent out at the time when we reached out the stock at dominos had begunto drift back up we would have blast in telling you to sell, we though the thrill might have been going here and ring the register, take the big gains for our viewers, so tempting right there. We were told to do the opposite. He said it was a very special moment, he was anxious to show us why with that return back up to say 36, dominos was tracing out a perfect cup and handle formation. Thats right a pattern we found reliable. A total launching pad for a bigger move. You caught the beginning of the cup at 36 bucks and general slope down at 38 i was nervous right there, he told me not to be. The stock climbed back to 36, and then we got a 37 side to 37 38 that would be the beginning of a handle that almost always signals a much higher move. It always goes like that very reliable. Sure enough, pot cities nailed it dominos received a base and then some it turned out the stock was simply consolidating, ready to power high in the next big move. This was positive action dom foes right there, they were embracing technology the web and cell phone, facebook we would have left a minimum of a double on the table if it wouldnt for guidance. I was concerned about monster beverage, i needed chartest to give me the skinny because i kept hearing red bull kept crippling monster. I was set straight, it was said for months the stock of monster have been bouncing out the 100 day move average blue line, you could see every time it looked like it was going down it rebounded. Monster was facing on a series of century century ang try angles when the stock hit the new line of resistance it punches right through. As a matter of fact, you had to buy this thing with both hands every time stock at 49, preceded to jump to 79, come founding the nay sayers who may have less negative had they known been the pattern or cared about it monster tied up with cocacola a truly monster one again, i would have been shane out of this stocks move it were for pawncy and his chart holdings. For instance, took a look at this chart, big move up, citigroup, everybody hate it in june 2010. The lowers kept getting high and the highs stayed the same. This is whats known as a wedge pattern. Weve also had tremendous success following the works of cal. Shes a femme knocksy queen. Cant not mention her on this show the fib queen uses ratios found in nature. We also like the work of garner who uses data from the kplodty future trading position to examine when hedge funds are leading in the wrong way technicians and charters can coexist, make piece with them more youll make a lot more money if your blind to one or the other and certainly after t i f y t o to o b o t h its not just a car, its your daily treat. Go ahead, spoil yourself. The es and es hybrid. Experience amazing. Whether its connecting one of or bringing wifi to 65,000 fans. Campuses. Businesses count on communication, and communication counts on centurylink. Hey cram america, in charts working for trend finding big moves behind them. On twitter can tell you a lot, hash tag tweets anyone first up, we have a feel good tweet from d thompson thank you for all your advice. I retired at 55. You know what i want you to continue to other than money other than stocks. Here my 19yearold son wants to start savoring for retirement. Do you have any advice were going to recommend a fund with low fees once that i have put 10,000 a side then focus on stocks. Next a shout out from hs s. Dont let periodically i get tired, angry and feisty. This is my little zone here right, its all nfl. You come into my box youre going to be tackled. Next up. villa jay writes max 401 k okay to invest there is show is known were an investing show where we demand you be in index funds jack says excited i found the jim cramer show at a young age. I only wish my mom and dad were still alive, because then finally, they can say, hey i told you jimmy, stay with cramer your brain is an amazing thing. But as you get older, it naturally begins to change, causing a lack of sharpness, or even trouble with recall. Thankfully, the breakthrough in prevagen helps your brain and actually improves memory. The secret is an ingredient originally discovered. In jellyfish. In clinical trials, prevagen has been shown to improve shortterm memory. Prevagen. The name to remember. All right, i like to say theres always a bull market somewhere, promise ill fine it just for you right here on mad money. Im jim cramer and ill see you next time. Welcome to the shark tank, where entrepreneurs seeking an investment will face these sharks. If they hear a great idea, theyll invest their own money or fight each other for a deal. This is shark tank. Im dallas robinson. And im mike buonomo. both and were from salt lake city, utah. We first met in college, and we just kinda clicked. Some ideas just percolate up. Weve created something that creates a chemistry between two people thats absolutely amazing. Yeah . Yeah, i think thats right. We grew up with a very strong moral background,
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