Friday, July 26, 2013

ONEOK surges, respecting longer-term resistance levels

JUL26 1538EST. Shares of ONEOK, Inc. (OKE) are not usually tracked by intraday traders, mostly as their average volume is relatively light (1.6M per day over the past 3 months). Yesterday, however, OKE gapped higher on news of a divestiture and, from the first minutes of trade, the pace of volume was several times (5x-10x) higher than the daily average. Even with a nearly 15% gap up, the first 5-minute high was surpassed before 9:40am, suggesting the potential for further upside.

OKE (ONEOK, Inc). May 2012 to July 2013. Daily candles.

Looking at the daily candles chart above, two resistance levels are clear: ~$50 and ~$52.25. The former was formed by three pivot highs over the past year, while the latter marks the all-time high (and the stock is no recent IPO; it's been trading for at least 20 years).

OKE (ONEOK, Inc). Jul 25, 2013. 1-minute candles.

And examining the intraday chart, the discerning observer can see that OKE respected these long-term resistance levels with almost surgical precision. On the first approach of price to either $50 or $52.25, a short position would have yielded quick profits. And on the break of either level, a long position would have likewise been profitable and, going with the day's trend, relatively easy to initiate.

Oftentimes, trades around long-term support or resistance levels are not quite this easy due to the incidence of false breakouts. Not so in the quite okay trades on Jul 25 in OKE.

Tuesday, July 16, 2013

Tesla tumbles, presents intriguing price action

JUL16 2206EST. Shares of the Icarus-emulating Tesla took a dramatic tumble today, with price declining steadily throughout the day, then showing what appeared like a selling climax in the early afternoon, and finally heading lower still.

The one-minute candles chart is below. $119.6 was a notable morning support level which, when breached, provided a sound short-sale opportunity. The same could be said of $117.8. Next up, $114.8 was a strong support/resistance level from several weeks back (marking the May high, as well as consolidation support on July 3), but it only held today for the lunch hour.

TSLA (Tesla Motors). Jul 16, 2013. 1-minute candles.

Capitulatory selling occurred around 13:30, evidenced by a steepening of price descent and by the heavy volume (the highest of the day, all the more notable as it occurred during the normally sleepy midday). Yet this climax did not deliver price to the relatively well-defined, hourly-candles trendline, which is currently around $107; as such, bulls were reluctant to commit capital, and the sell-off headed lower.

In the last 90 minutes of the day, price action changed somewhat. Bulls were able to engineer a higher high and a higher low, which marks the tentative beginning of a new uptrend (but, of course, there is no guarantee that it will last).