Brian,
As mentioned Stockcharts.com has a lot of resources and I too prefer their candlestick charts. I start with the gallery view that shows daily, weekly and point-and-figure charts.
IBD has a website with some decent free “educational” content on the way they use charts in combination with fundamentals. It is clearly self promoting, but the link below
http://education.investors.com/courselandingpage.aspx?id=735…
They concentrate on base patterns and breakouts, as opposed to swing trades and minor patterns. The dogma is that if a stock has strong growth fundamentals, then you buy it on a proper breakout from a proper base.
If you are really interested buy O’Neil’s book “How To Make Money in Stocks”. It explains the important base patterns, price and volume, market timing, and the fundamentals of good growth stocks. A good read even if you never implement any of it. The system is tough because it forces you to really fight human nature, and like any other set of rules, if you start breaking them with fear, greed and impatience, you lose. It will seem easy when you read the book, but fear not, it is a lot of work and is not “easy”.
Notice how well Saul fights human nature. When he has a conviction in a stock, he will buy it as it is falling “knowing” it will come back. That can also be a hard thing to do as humans feel much more pain losing a dollar than missing out on making $2. Clearly his system works for him without concern of what a chart says.
http://stockcharts.com/freecharts/gallery.html?s=wetf
Here is a recent note from IBD (investors.com) on WETF
WisdomTree Investments (NASDAQ:WETF) is building the right side of a possible base, but it needs more time to rise into the upper half. It’s just recently risen about its 200-day moving average, and its 50-day line is still below that. It would be a first-stage base by virtue of undercutting a prior base. It had three quarters of declining EPS before putting in two quarters of sharply rising earnings.
WisdomTree is the nation’s fifth-largest sponsor of exchange-traded funds. Its internally created indexes claim to outperform by weighting stocks, not by price or market capitalization like most ETFs, but by fundamental factors, such as earnings growth or dividend yields.
Wall Street forecasts a 51% EPS increase this year and a 24% increase in 2016. Both represent upward revisions.
Lots of fun jibberish…why is it a possible base? what is important about 200 and 50 day moving average (simple or exponential)? What is a first stage base and how many stages are there?
Here is one on LNKD:
http://stockcharts.com/freecharts/gallery.html?s=lnkd
LinkedIn (NYSE:LNKD) is another stock that has set up in a base, having already formed a handle with a 258.49 buy point. The stock corrected 40% while building a base, but has done so over 39 weeks, compared to 24 weeks for Universal.
LinkedIn also received a shot in the arm from an Oct. 29 earnings report that easily beat forecasts.
The stock gapped up and closed 11% higher the next day as it built the right side of a base.
Here is a sample IBD rating on LNKD (very highly rated for EPS, RS and other factors they consider)
ChecklistRating
Composite Rating 96 Pass
EPS Rating 95 Pass
RS Rating 89 Pass
Group RS Rating A+ Pass
SMR Rating A Pass
Acc/Dis Rating A Pass
And about Palo Alto
http://stockcharts.com/freecharts/gallery.html?s=panw
IBD a strong emphasis on price and volume action to indicate support from big buyers…
Tuesday’s session, in which Palo Alto Networks gained more than 6% in heavy trade and reached within an arm’s length of crossing a 189.82 buy point, clearly demonstrated institutional investors actively accumulating shares.
(For aggressive investors, the stock cleared a trend-line entry Tuesday. The buy point is around 178.)
What has been the overall picture of large investor activity in recent months?
There are at least two ways to answer that question.
Checking the quantity and quality of funds owning shares is a great first step. In this measure, Palo Alto (NYSE:PANW) passes with flying colors. As of the September-ended quarter, 919 mutual and hedge funds owned a combined 35 million shares, or 43% of the total share float of 81 million. (Executives own 4% of the firm.) That’s a nice jump from the 232 funds owning 19 million shares in the same quarter two years ago.
and ratings on PANW
Composite Rating 97 Pass
EPS Rating 99 Pass
RS Rating 92 Pass
Group RS Rating B- Pass
SMR Rating A Pass
Acc/Dis Rating B Pass
All that being said, don’t rely on a chart to make all your decisions. Saul does not and the MF services do not and they beat the S&P quite handily (unlike most mutual funds). Read some websites, read some books and when you reach 1000 posts on Motley Fool, think about using charts to support your decisions. Meanwhile, you will learn tons more from this board than any book or website you are likely to find 