Hey hey: what's up my friends, so welcome back to this month's price action analysis, where i want to bring you a deeper into the stock markets, because this is where i'm seeing trading opportunities right now. So for this month's video, we'll talk more about the stock markets, so a quick overview. If you look from left to right on this chart over here, this is the chart of the s p. 500.

You can see that it's in a long term, uptrend and as of right now the market has made a pullback recently and right now seems to be heading higher. So my bias is the same. I'm still looking for buying opportunities. If the stock market is in an uptrend, i look for buying opportunities.

If the stock market is in a downtrend, i pretty much just remain in cash, so i simply trade. What i see i see that the stock market is heating up high over time. So i'm looking to buy, that's it so before i share with you uh some of the stock trading opportunities that i'm looking at right now, i want to share with you a very powerful technique right that you can apply to the stock markets, and this technique is Called relative strength, so for those of you who are unaware relative strength right relative strength refers to. You know how strong is a particular stock right compared right relative to, for example, the stock market.

So, for example, if let's say the stock market is up 5 and this particular stock is up 10, this tells you that this stock is stronger in terms of relative strength. So this is what i like to see right when i'm buying stocks honestly stocks right, which are stronger relative to the stock market relative to the s p 500.. You might be wondering, so how do i do that right? So this is where you know, having a watch list of stocks helps right, and this is where you know, observing the price action is very critical. So let me share with you a few examples.

So if you look at this one here right, so let me share with you uh. First, the stock of the stock called net okay, so net it's over here. Let me find that one here: okay, so if you look at net on on this day right on the first of october and this and the fourth of october right, so these two candles, the first and the fourth of october right this stock. On the first of october, pretty much have a bullish price rejection the next day closed higher.

Once again. So if you look at this just this chart itself, you can see that it's pretty bullish right. You know, because you know price coming towards an area of value. Like this uh area of support over here and yada yada, but that's not all because where i want you to focus your attention on is on the relative strength on this stock.

Because if you look at the stock market on the first and the fourth of october, as what i'm going to share with you right now, this is the smp on the 1st and the 4th of october. This is how it's reacting, so this is this over. Here is the first of october, okay and then subsequently this year is the fourth of october. So if you look at it right the first of october and you come back to the first of october of the stock - i shared with you earlier net, they are both having a bullish price rejection.

But where is critical is on the 4th of october, the stock market had a down day closed bearishly for the day, but if you look at meaning right, if you look at this particular candle here on the stock market on this candle here, you compare this to The 4th of october on the stock net, which i'm just going to bring up quickly over here right, which is actually cloudflare. You can see that on this day, 4th of october, this stock actually closed higher for the day, whereas the smp is down for the day. So all else being equal right. If let's say i have a similar trading setup, all the stocks are in an uptrend they're from an area of value.

They all have bullish price rejection, but if one happens right to have a stronger relative strength compared to the stock market, you can be sure that i'm looking to buy that one particular stock over the rest, and this is what uh pretty much you know. What happened is that you know uh the market, this market just continued to explode up higher, as you can see over here. So you can you compare this to the s p. 500.

Over the last two days. Let me just uh walk you through okay. This is the smp 500.. You can see it over the last two days.

It did went up right on here and here, but if you look at the strength of the move right, it's nowhere as strong right as the stop which i've shared with you cloud flare over here. So this is the power of relative strength. So again, right. What's important is that in future, when you're trading stocks right - and you see that hey this stock, or rather the market had a down day, but this particular stock had a strong reversal on the day.

The market is down right. It's a sign to you that that stock is uh. Stronger, could be stronger in terms of relative strength and there could be a move coming soon. Of course, we don't just trade based on on relative strength.

We use that as a confluence right on top of our price action trading techniques right to enter the trade okay. So let me give you another example: let's see uh another one is car okay. So if you look at this one here, let me just go. Look at car, okay, every budget group.

So if you look at this, let me just take you back in time to this candle over here. On this day, this is uh on the 16th of september. Okay. So, let's look at what on the 16th of september this stock, we had a breakout of this area of resistance, okay, so on the 16th of september, what is the stock market doing? Okay, just look at the s p futures on the 16th of september.

It's here the s p 500, at least for the futures market. It had a slight down day over here right, whereas the earlier stock that i shared with you av is right. The stock actually broke out right to new all-time high. So let me just bring you back to that stock again.

If this avs budget group, this stock over here, broke out right on this day, as you can see over here so c, do you see where i'm coming from and again we don't just simply buy this stock because it's stronger in terms of relative strength for this One, the setup here is simply right, a breakout with a build up, so you can see that the price at this uh area of resistance - and then we have this - build up form over here. Then the price pretty much broke out of this build up and not just a normal breakout in terms of relative strength, where the stock market had a down day, this stock pretty much break out to new all-time high. So this tells you that this stock is strong in terms of relative strength having all these factors together right. This is where to me right, it's a high probability, or rather a trading setup that you want to trade over and over again, at least for me.

Okay, so in this case uh of course this is a cherry pick chart this stock rate continued. You know, break up higher. So having this in mind, let me share with you a couple of trading setups that i'm looking at you know this week or possibly over the next few weeks right using this relative strength concept that you've just learned so two stocks. So it comes to mind right now, number one, it's again just just to bring it back quickly to what the s b 500 is doing.

You can see that right now, it's pretty much uh heading higher right after this pullback over here is trying to you know hit higher over here. So if you look at any stocks right now, let's say if hovering near the highs right, the stock is likely right. Stronger in terms of relatives, so one example is this one over here: hmhc, okay, hewton mifflin, harcourt company. So you can see this is stock right.

Unlike the s p500, which i've shared with you earlier, which was you know, uh making a pullback and con, which was something like this right, making pullback continue to go up higher this stock right now is already forming a build up at the highs, consolidating potential energy Right getting ready, in my opinion, getting ready to possibly make a breakout. So what happens is that, if this stock right, if right, this stock, does break and close above this highs, okay, break and close above it, i am looking to be a buyer to go along on this particular stock right and since i can see that this trend Is you know intact, right, heading high over time, i'm looking for a trailing stop-loss to trim my stop-loss and see you know how far this this stock, or rather this trend, can last and by the way, disclaimer right. Whatever i'm sharing with you is purely for educational purposes. Only when they make money, you lose money, it's not my responsibility.

It's all on you cool right and by the way, if you're, enjoying this video smash the thumbs up button right now, will you do it right now? Okay, so this is the first stock that i want to share with you hmhc right in terms of relative strength. This stock is showing a good signs of relative strength and it's in a beautiful uptrend looking for potential breakout trading opportunities and another stock to share with you is oln olin corporation kind of similar story, but this one here is instead of forming a build up. It's forming more of a ascending triangle pattern over here, so you see a series of higher lows, higher lows, higher lows, higher lows, possibly this one here into this area of resistance. So again, if the stock, you know, break and close above it, i'm looking to buy this stock right, which is already in a bullish uptrend.

So hopefully this this uh technique right. This relative strength technique which i've shared with you right when you use it to trade. The stock markets, it helps you filter in and zoom in on the best of the best trading opportunities, because this is what i look for right when i trade the stock market, and if you want to learn more about such trading techniques, you know price action, candlestick Pattern support resistance and whatnot. You can go down over here to this uh this site over here called price action trading secrets, get a copy of my amazon.

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