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Transcript

HDAnd Macys looks like it can keep going further down

JRLooks like you got the +21.74 close. Good luck!
BOB IACCINO: Hi. My name is Bob Iaccino from Path Trading Partners, also a partner in tradingprofits.com. And this is another edition of Tech Trader for Real Vision TV. I'm going to talk about a stock in the retail sector today Macy's. Now retail bricks and mortar, specifically has been really badly beaten up.
But this is Tech Trader, and the price action, along with a couple of other things, is kind of looking like it has the potential to go our way in the next few days. We do have US retail sales being released later this week. It's probably not necessarily by itself a good enough trigger for one stock.
But we're going to go ahead and take a look at this one stock from a technical perspective. And I'm going to do things a little bit differently, since I've gone over this pattern with you guys before. I'm going to show you our scan as to how we get the universe of stocks that we then look for technical patterns through.
OK. So here is a chart of Macy's, Inc. This is a daily chart. I'm going to briefly show you the weekly chart real quick. I've got this nice little weekly up move that we've had in Macy's. For those of you that have seen my videos before, we work with something called a rotation zone, which is the 8period exponential moving average and the 21period exponential moving average.
And I say "period," because this is a weekly chart here. So that's an 8week and a 21week. We go back to the daily chart here. This black line here is the 8day exponential moving average. And this magenta or purple line is the 21day exponential moving average.
So before I talk about the pattern I'm seeing right here and why this pattern matters, I'm going to go ahead and pull up Vantage Point here. And I'm in something called a medium trend stocks scanner. So to find a stock like Macy's, the first thing I'm to do is I'm going to jump into my Vantage Point software here. And again, everything I'm about to go through, you can find information about this particular set of scans on tradingprofits.com, which we are partners in, full disclosure.
But this is something we've been looking at and helping to develop since about 2002. So I thought it'd be interesting to show you guys.
So I'm going to go into the file here. And I'm going to look at recent IntelliScans, of which I'm going to go with MT stocks, which stands for MediumTerm stocks, which kind of fits the pattern that I'm looking for to begin with.
Now, here, it's got 1,204 stocks that came out, 1,186 displayed based on a set of criterion. And here, of these 18 displayed, I've got the medium term crossover set at up, the neural index set at up, the short term difference trend set at up, medium term difference trend set at up, and so on, long term difference trend and then the predicted trading range direction, the MACD crossover, the TSI crossover, all set at Up. You can see there's dropdown arrows on all of these, where I can choose Up, Down, or All.
I've chosen up for all of these. And that's helped me get this universe of 1,204 stocks down to a displayed set of 18. So I've already taken the opportunity to go through this list of 18 that fits all the criterion I want. And let's just go ahead and look at the Macy's chart within the Vantage Point IntelliScan here.
So here is the Macy's chart. And what you're seeing right here is the artificial intelligence provided by the background of this Vantage Point software is showing me an up move and a predictive range for the next trading day. Here, what I've got is a short term predictive moving average, a medium term predictive moving average, and a long term predictive moving average. And they are all pointing up with two of the three just about above this zero line in this artificial intelligence predictive network here.
So two of them are above, and the short term is leading. That's what we'd like to see. We like to see a steep angle on all three of these. I like to see three of them above. You can kind of see that the longer term is just about to cross the zero line. It doesn't mean that it will. But it's just about to cross it. The medium term and the short term have crossed, with the short term leading.
And the neural network here has turned from red to green. These are all good signs that I'm looking at a stock that has the potential to get a decent sized move higher. Again, I've got retail sales on Thursday. So it's possible that Macy's could get a boost from a good retail sales number not necessarily predicting that at this point.
But this is what we've always used Vantage Point software for. And again, you can find our set of scans at tradingprofits.com. So now, let me stop here in terms of the scanning part, which I've never showed you guys before, and get back to the chart, which I have showed you.
Here is a Macy's chart. Now, I've talked to you guys about this particular pattern before. What we have here is a daily double top pattern, where we've already gotten through our rotation zone. So let me start with what the rotation zone is. The rotation zone is the 8period exponential moving average and the 21period exponential moving average.
As you can see, on this move down, the price went up into the rotation zone, and then fell. That's why we call it a rotation zone. We need to see price get up through the rotation zone in order to be able to take a trade. Again, we want it out of the way.
Now, we've got one of our high probability patterns here, which is what we call a Path Trading double bottom. Now, why do we call it a Path Trading double bottom? Well, because with about 10 to 15 years of research and back testing, we found a set of circumstances where double bottoms fit a high probability move.
So I'm just going to click down here on my screenshot. And I'm going to sketch on a picture of this chart to show you what I mean. So first of all, in order to have a double bottom, you need two bottoms. So here, we've got one. And here, we've got two.
We like to have some space between those two bottoms, where you could kind of draw an oval in. And there's all this white space in here that really kind of carves out how clear the two bottoms are. So that's number one bottom number one and bottom number two.
The second criterion we look for is for them to be in a relative range to each other. That relative range is 25% to the upside and 25% to the downside, which approximately would fall in between these two red lines. So what do I mean by that? The right hand low needs to fit in a 25% range of the left hand low. This one clearly does. So again, we've got that.
Now, in order to have a double bottom at all, which a lot of people miss out on a lot of people will tell you there's a double bottom here, but it isn't necessarily a double bottom. Sometimes, you just have two bottoms. So for example, right here, there's two bottoms. But that's not a double bottom pattern. It's not a high probability pattern.
Why is that? Well, in order to have a reversal pattern, which is what a double bottom is, you have to have a move that is being reversed. We have that here in this down move that I can show you right there. This down move is the move that would be reversed by a fulfillment of this pattern. Therefore, we have a reversal pattern. Again, you have to have a move that's being reversed.
We've got this very clear W. The traditional W look of a double bottom is here as well. So everything kind of fits in. And then lastly, what we'd be looking for is the target. OK? Now, the target of a double bottom, the high probability double bottoms that we've researched, is the difference between the peak and the right hand low added to the peak.
Now, we've done this with the scan tool. All this is a simple Fibonacci tool that we installed Gann levels on instead of Fibonacci levels. Here is the 200% extension. What I mean by that is the difference between this and this added to this high right here. So the difference between 21.74 and 20.02 added to 21.74 gets you to 23.46.
This cannot extend past the move that is being reversed. So in other words, if this 200 came in up here somewhere, it would be extending past the move that is being reversed. That would mean that's not necessarily a high probability target.
But in this particular case, we don't have that. We have the 200 right in here, right in the body of the move that is being reversed. This is a perfect high probability double.
Now the last thing we need to happen in order to take this trade is we need to have a daily, because this is a daily chart, close above the peak. And we currently don't have that. As I'm recording this right now, we are not yet closed above the peak. The day has to close out first of all.
So if we get a close above 21.74 in Macy's, we're going to take a long looking for about $1.50 to the upside of this to get to 23.46. That's what we're going to be looking for in this particular chart.
Let's go back now to the live chart. Here is the current price action. Here is the measured out move. Again, all of what I showed you in that screenshot that I was able to sketch on is in place. Now, again, we've got retail sales coming out on I believe it's Friday morning. That could be enough to actually get this move up a percent or two in order to get into this area. Now we do have the 50day moving average in the way.
So what does that mean? Well, you have to respect something that's looked at like that in the markets. OK? So it comes in right around the 150. That's the 150 extension of this move. The 150 is where we do a stop adjustment anyway.
Now our stop on this trade is going to be below this 25% retracement level, which comes in at about 20.45. Let me make sure I'm right on that level there, because it's hard to read. Yes 20.45. So our stop is going to be below that 20.45 level if we get a close above this peak anyway.
So let's say we enter this at about 21.75, 21.76, somewhere around there. If we're able to enter there, our stop's going to go below 20.45. So say that it's about 20.14 or so, 20.12. If we get up to this particular moving average here, which also, again, happens to fall into the 150, which is the traditional place where we then move our stop, we'll move our stop up to below this 21.31 level or below this 8 exponential, hopefully both. OK?
So as the market moves up, obviously, the 8's a fastmoving EMA. So we'll get above this 21.31. Let's put the stop below both of those if we get up to here. And then we will just hold the trade, trying to get to that 200 target.
If we get up to the 175 here, which looks like it comes in at about 23.03 yeah, that's right about 23.03, we can move the stop to break even at that point. And then we're going to wait it out. Or you can take a portion of it off here at the 175, whatever you would normally do on a trade like this.
So again, Macy's, in our scan here, came out with an Up condition in all of the scans that we do. Let me just pull this back up here. the mediumterm crossover, the neural index, the shortterm difference trend, mediumterm difference trend, longterm difference trend, the projected trading range all came out up. We've got an upfacing MACD crossover and a TSI crossover as well. All of that fits.
If I pull this chart back up on the Vantage Point software, we've got a predictive range that's to the upside. And then we've got our three predictive moving averages as per the AI that is powered by Vantage Point showing us, on a 45 degree angle or better, that it looks like price in the future is going to drive higher as well.
And then on top of that, our chart, our traditional chart analysis fits. And you can see right here, we're trading at 21.76. If we get daily close above there, that trade is now triggered.
So that's what I wanted to show you guys today. Macy's, we're likely to be in a long position in this story. We are not yet. But it's set up in such a way where hopefully, I was able to explain the technical reason for being involved in that. We do have retail sales. As I always say, price action is the steering wheel, but news is the gas.
So when we get pointed in the right direction, we have our steering wheel pointing in the right direction, we could potentially get retail sales or some other news to step on the gas and take us to our target.
I'm Bob Iaccino from Path Trading Partners. Again, if you want to look at the Vantage Point stuff, go to tradingprofits.com. I'm doing another edition of Tech Trader TV for Real Vision TV. Thanks for checking us out.