Sunday, June 1, 2014

Real trends versus projected trends

Case study, real trends, versus projected trends, using Facebook (FB), $FB
I will keep this study on the top right hand side of the blog, right near the ABC pattern.
You will probably have tons of questions regarding this, feel free to email me.
A projected trend is NOT a current real trend
I have studied this event for over 5 years
Real trends are the ones you see on the chart with red arrows, in the case of the main trend that is broken, it connects the lowest low to the low prior to the highest high.
Projected trend 1 (black dotted arrow), is active
Projected trend 2 (light green dotted arrow), is not active ; why ? price has not dipped (yellow arrow).
So why did I draw that light green dotted ? Price is showing signs of reversal
Let's assume that projected trend 1 does work, that would mean that the blue arrow keeps zooming up, thus creating a higher high, confirming that projected trend 1 becomes a "real trend"!
If you are an option trader, you need a time frame and price projection
If next week, Facebook dips, and the yellow arrow confirms its fall, we would need a new lower low to convert projected trend 2 into a real trend
Lets assume PT 2 is "active", it would be our key resistance level
Projections means planning, anticipating, having a clear "scenario in mind"

This light blue arrow is also a projected trend line
If this scenario takes place now, expect Facebook to zoom up quite fast, thus creating a higher high, and eventually going into a parabolic rise
We all know how a parabolic rise ends up ...

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