Good afternoon, everyone. I' m happy to see you here in our Schwab Coaching. I' m Connie Hill. I' m happy that you' re joining us for our Getting Started with Stock Investing. Now, I thought I changed a little setting here that I didn' t, so let me go fix that. Okay, there we go. You know, last week we talked about what we might consider putting on a watch list and some of the characteristics we would look for. This week, we' re going to kind of answer the next question that a trader might come to, which is, well, when? When should I get into this trade? When should I pull the trigger? How am I going to figure that out? So today, we' re going to be spending time on what are called the technicals.
And the technicals are essentially what we' re reading on the chart, kind of analyzing the information they give us so that we can know when a proper time might be to get in. Okay, this is going to be one of the most important skills you' re going to be able to develop that will work. So really important stuff we' re going to cover here today. Now, I am joined in the chat with Scott Thompson. I appreciate Scott being here. Many of you might recognize his name. He' s a veteran of the markets, one of our managers. And so he' s going to help me out with questions. So as you have them, go ahead, type them in. I don' t want anybody to be bashful about having any or keep, you know, not saying what their question is.
Okay, even if you think it' s silly, you' re really beginner. Guess what? This is the beginner' s class. This is where you actually ask the questions. Now, those of you that are listening to this on the recording, I don' t know so many of you do. When you have a question, put your question in the comments section, and we' ll go ahead and review those throughout the week so you can get your question answered here as well. Well, let' s go through some brief disclosures and lay out our agenda for today. What we talk about is intended for educational and informational purposes only; it shouldn' t be considered an individual recommendation of any security strategy or attack, account type.
We will be talking about technical analysis here today, and I have to tell you, I love technical analysis - okay, that' s seeing what the charts are telling us. But there are other approaches, including fundamental analysis, which may assert different views. Past performance of any security or strategy does not guarantee future results or success; investing involves risk, including a loss of principle. All right. This is an overview of our series that we' re going to be talking about. Where I teach a step-by-step principle one week, we go through it pretty detailed, and then we add on the next layer. So we started our series over a couple weeks ago. We talked about the different types of stocks somebody might be interested in and how they might use it.
And then last week, we talked about what are we looking for? What do we want to see and put on a watch list? Alright. So today, we' re right here in this little area here, technical analysis. And like I said, we I' m going to spend quite a bit of time using and showing you some things that we' re going to use throughout your trading life. Now, our agenda will be this: identifying and defining various technical indicators. And I' m going to say in technical terms, because some of these terms might be new to you. So we' re going to spend some time doing that. We' re going to also discuss how an investor or a trader might want to use technical analysis. And help us to identify the entry point of trades.
We' re going to be looking at a lot of stock examples here today. We' re going to be using the Thinkorswim software, so that' s what you download to your computer. It As a little bit different than the web version or the mobile version. All right. I' m going to say it' s the most robust version. But don' t worry if you' re not using all of it all at once. You' re going to just learn little pieces of it a little bit at a time. Now, I will keep my eye on the chat, see if there are any questions that I need to address. Remember, of course, Scott is helping me out in the chat here as well. So let me just check real quickly. I think we' re okay.
Oh, I' m going to let Scott answer that question, Wiley. All right. When we might do our next virtual workshop, which we have one this week, for those of you that are kind of trying to get used to moving over to Thinkorswim from StreetSmart Edge. So look for details for the next one to be coming up, which I think is at the end of the month. All right. Let' s start talking about some of our technical things we want to consider. Now, when we' re talking technicals, it really means the chart. What are we seeing on the chart? What is it telling us? What can we observe about the chart? And so we might put on some indicators to help us identify what' s going on.
Ultimately, most of them revolve around price and changes in price and volume. What happens? So on this screen here, you can see this blue line coming up here, and that is a 30-period moving average. And so many times we' ll be looking at daily charts, which means each of these bars, and in our case, we' re going to use candles, represents one trading day. And the periods, you know, if this is a 30-period moving average, it essentially is a 30-day moving average. But if we were to move to a longer-term chart and look at weeks, then it would adjust, and it would become a 30-week moving average. Okay, so when you hear that period, just kind of key in, or we' re looking at a weekly chart or daily chart, a lot of the time we' re going to be on a daily chart.
A faster- moving average can be more responsive to price movements. So, for example, we' ll put some different moving averages on, but one that' s a shorter time frame, say like a 10, we' re going to see it wiggling around a lot more than something like a 30 or a 50 or a 200-day which is a long-term moving average. We will spend a session on moving averages. A slower moving average can help you out with this strong trend, but it' s a little bit slower for it to reflect changes in the price. All right, next up, support resistance. You are going to learn this principle, and you' re going to love it, okay, because it gives us a way to observe the charts. Now, I want you to do a math test.
I want you to do a math test. I want you to do a math test. I want you to imagine a high- rise or, you know, maybe even an apartment building that has different floors. And on this apartment building, what might be the ceiling in one apartment could become, like, say this is the apartment, this is the ceiling where the yellow line is. But once you' re past that ceiling, you' re basically up to the next floor, right? So whatever was the old ceiling becomes the new floor for the next level up. And support and resistance will work that way. Now, resistance is what we call the ceiling here, okay? The stock may be run to it, pulls back, runs to it again, maybe gets rejected again.
And then at some point, news is big enough or some occurrence of something to cause the momentum to shift enough to break above the resistance level. And then we expect the stock to act as what we call support, a place where the stock can' t drop down below. That' s like the floor, right? You' re standing on the floor. It' s holding you. We' re not expecting to drop through the floor, although sometimes support will be broken. We' ll see that when changes, trends change. But in this case, notice that then when the stock pulls back to this area that was the ceiling, it' So, now the floor many times it' ll bounce up. And so it' s helpful to be able to observe that. So we saw it happen here.
We saw it happen again right here. And so, you know, prices have a tendency to go back to these areas of support and resistance. Just taking a quick look at our chat here. Oh, I' m seeing something already. Looks like we have in our survey or out in our chat a survey. And those of you that have been with us know that from time to time, we' ll go out, see what your opinion is in a really simple survey. And I like simple surveys. I don' t like to do long surveys. Two questions. All right. And you just fill in the radio button on a scale of one to ten. One, you hated it. Ten is I love it. Just on today' s presentation that we' re using here today.
And then there' s two questions. If you want to answer them, great. I also encourage you to use it as a place to communicate with me. For example, maybe you don' t want to answer the question, but there' s a place there you could put in a request. And you could tell me, hey, I' m struggling with this. Or could you maybe bring a session up and answer it? And then you could tell me, hey, I' m struggling with this. Or could you maybe bring a session up and answer a question related to whatever it is that is your concern. Tell me about that. Because I like to weave those in to our classes so you can understand maybe something that' s hanging you up. Okay. So use them for that as well.
Now, we' re not finished with our class yet, obviously. But if you' ll click that link now, just let it sit in the background. And then when you need to leave or our session' s over, then I' d ask you to fill it out then. Okay. Let me see if there were any other questions besides that. And I think there isn' t. Scott' s just doing a great job helping me out here. Next. Well, let' s get rid of the drawings. Okay. Another thing, and we Re going to use one of these today, that a technician might use in their charts could be a trending indicator, which would be many times like the moving average. And it' ll sit up here with the price of the stock.
And then there' ll be something else called oscillating indicators. They typically will sit in a different window of the chart. And it might be telling us things about momentum, might be telling us things if we are getting into an overbought or an oversold condition. We' ll start learning and hearing those terms. And so there' s different ways that we can put our chart together here. All right. Last component typically that you' re going to see on a chart is volume. Sometimes volume makes a big deal. We' ll talk about when. It' s important. We see extra volume or what it means maybe when there' s not as much volume, but it' ll be something that you' ll want to pay attention to.
And then something we talked about last week was that we wanted our stocks to have at least a lower limit up 250 ,000 or maybe 500 ,000 shares traded per day to let us know that it' s active, that it should be easier for you to get in and out of because there' s a lot of shares exchanging hands. All right. Let' s go out. Let' s look at some examples here. We' re going to head over to Thinkorswim here. And actually, I' m going to start on SPX. And this is the S&P 500. I want to start here and talk through the different things that we were just kind of bringing into play, right, and explaining. So number one, some of you probably haven' t worked with charts a lot yet.
So, some of you probably haven' t worked with charts a lot yet. So, some of you probably haven' t worked with charts a lot yet. So I' m going to show you how we might just set up a typical chart. This little beaker right there, I should say we have a class on getting started with Thinkorswim. Cameron May teaches that; he does a fabulous job with that class. I believe it is on Mondays. I can' t remember the time. Scott might help me out by putting the time in there. It' s an excellent class to go to. It kind of works hand in hand with this class because we' re learning some principles in this class, the basic ones, and then Cameron' s going to add to that.
But as we look here, this beaker means we could put in, pull in some studies. So that' s what we' re going to do. Let' s put in a moving average. Now, we are going to look for what' s called a simple moving average. Now, I could grab this and drag it all the way down here and find simple. My way to get to it a lot faster is just start typing in what it is. So, I just typed in S-I-M-P. Here' s our simple moving average. We' re going to bring that over. We also want to see, and I' m going to talk to you about it a little bit today because it' s very relevant in our, kind of what we' re seeing going on in the market right now, RSI.
And that is that oscillating indicator. And then we want volume. Volume that I prefer to use doesn' t mean you have to use it. But I like the one that says volume average' because I like to put a moving average on the volume. And then I' m going to drag that over. And then I' m going to so let' s bring this over. And then we' re going to personalize this. Now, the simple moving average came in at a nine. And we' re going to look for something longer than nine. For today, we' re going to use 30. 30 and 50 are moving averages to help us with the intermediate trend of the stock. Okay, so we' ll put that at 30. I' m going to make it a little bit fatter.
I' m going to change that to a three. And then I' m a creature of habit. I like that intermediate moving average to be red. Okay, so that' s set up. Now, this RSI, we' re really not going to change it a whole lot, except I want to make it thicker. Okay, so typically, you' ll just leave the settings just the way they are. I' m going to change the width. So it' s a three. I' m going to select okay, and then here is the volume that I that we put on there that says average. I' m going to click on this little tab here. Actually, that' s not true. I' m going to put a length in here. The default is 50. I' m going to change this to 30 as well.
Okay, 30 day moving average on the top. This one' s for our volume. And then I' m going to click here what says ball app. And I just like to make it a little bit more bold. Okay, so I' m going to change this to again to a three. And then I' m just going to make this a darker color. So maybe a little bit easier to identify. And let' s go ahead and hit OK. If you need to make a note on anything, this is just a simple chart that we' re going to use today. And it' s going to give us quite a bit of information. Now, because we' re looking at the index, and we don' t really trade the index, the volume' s missing. Okay, but that' s okay.
When we start looking at stocks, it' s going to appear at the bottom. I' m going to give us a little bit shorter time period to work here. And when we' re talking about, say, a trend, a trend is when we' re seeing the stock make higher highs. Higher lows. Okay, so we want to observe when that' s happening. And we want to observe when maybe we see it changing. Okay, let' Zoom in here a little bit closer on this chart. I' m just going to maybe take this much area. This 30-day moving average helps us know that, gee, yeah, the index has been in a decent uptrend before I even zoomed in here towards the end of last year.
And then more recently, we' re starting to see some things that might be a little something to pay attention to. Okay. One, I would note, hey, we just have another all-time high here on the SPX. And I' ve got my high bubble showing about up to 5264, which is helpful to see. And then if we are looking for an uptrend, we' re going to look for it to get beyond that. So maybe we have another dip, and it rallies up, then we would want it to get a little bit higher here and become the new high. And to notice that that doesn' t happen, that can give us an idea that maybe some things are changing. Maybe trends are changing, or maybe there' s some weakness.
It doesn' t necessarily mean that every time something makes a lower low or breaks support that, oh, man, we' re going to have a bearish trend. But it will be a clue to us to say, hey, we need to be paying some attention here. And one thing that I' m going to kind of point out to you is when the S&P 500 rallied and ran again it was almost about the same height, OK? It was very close. But it pulled back, and then it ran again to right here. And we can tell this is not as high, right, as these highs here. And here on this red candle, man, that low that it put in right there, let me get my drawing until this will help me, this low that it put in here certainly was lower here.
We want to see it making higher lows, and it didn' t here. So that should be kind of a yellow flag to us to say, hey, maybe some things are changing. And then we see this period of time here where it ran, and it didn' t get higher than that, and it didn' t get higher than that, OK? In fact, we could probably draw in a little trend line there connecting the tops. So that' Something we want to pay attention to. Now, what about support and resistance here? I want you, if you' re looking at this with me, I want you to maybe see where you think I maybe should draw a support line and a resistance line. Sometimes these lines can be diagonal, too.
They don' t always have to be horizontal, although I think horizontal is a good place for people to start to identify it. So if we came back here, and let' s just go to a one-year chart, we' re going to see, man, for the most part for a year, I' ve been making higher highs and higher lows. I' m going to use my drawing tools up here. I have a video where I teach you how to build that. And Brent Morris may actually, in his class as well, doing Exploring Thinkorswim. So you can either click on the drawing tool or just click on that gear on your mouse, if you' ve got a mouse with a gear. And then you can bring up the toolbar here.
And for something flat, we would just grab that price level. And then we might just kind of observe. Where we see the stock running to and kind of hitting its head and pulling back. Okay, so we' re going to go for, you know, maybe this 46 area. It was a level of resistance. We would also kind of note here, look, these lows kept getting lower through this period of time where the highs and the lows both went lower. And if we look at where things are right now, I might be zooming in a little too tight. Let' s try it from here. Where might you see? Some support and resistance. Now you might see this one here at the top, because it had, oops, I want to use my flat, because it ran up to that area a few times, right?
This 25-ish area. Ran to it, pulled back, ran to it again, pulled back, ran to it again, pulled back. So that' s acting as a pretty strong ceiling right there. Now, do we see any ceilings in the past that maybe are acting like floors right now? I' m going to just take a quick look in here. Oh, Scott. s helping me out. Thank you, Scott, for helping out, answering some of these questions, making sure that they' re not intended for me. Okay, what about in this area? And I want to emphasize support and resistance are kind of areas. Think of them that you' re drawing them with a big old Sharpie, not a fine tooth or a fine point. You know, ballpoint or pencil, right? And they can get really, really small.
You know, some people may even want to draw them in as an area, and sometimes they might make this line thicker to kind of represent that. What' s interesting is I see some resistance about in this area, and I m going to keep drawing it across, and had a hard time getting above it. Finally, it did, right? Pushed up, and then it kind of danced around it, I' m going to say, right? A little bit below it, a little bit higher than it over these periods of day. So it may have been acting like support over here, dropped below it, but it' s still kind of in that area. Yesterday, it looked like maybe it was going to bounce off of it, and then, of course, we had some reaction to some of the economic news today.
And, of course, right from the get-go this morning, index was; all the major indexes started out down. Okay, so right now, if we Okay, is the S&P at support or is it at resistance? We would say, well, it' s on the bottom part of this, right? It' s on the bottom part, so it' s probably just broke through support. It just kind of so happens that the top of the candle was right there, but remember, it' s moving down, okay? How far might it fall? We never know, right? But we might say, well, where was the old support area? So I' m going to draw in maybe what could have been the support previously, maybe about in this area, the 5033 area, okay? So you can see where these different levels occur.
Now, I' m going to encourage you to practice developing that skill. First, for some of you, it might be a little bit difficult, and there might be others of you that are just like, ' Bam', your eyes see it, but the more you draw it out on your charts, the easier it' s going to be to recognize what it is. I should have pointed out here over here on the far right is price. Down here, that' s the RSI. We' re going to go to something else. We' re going to be able to see the volume here as well. So I want to, let' s bring up this chart. It has some interesting things going on. Wow. They must have had good earnings or good news here. Look at that tremendous gap.
This is something we would notice. Wow, it had a big breakout. It gapped up. And sometimes that bottom of the gap will act as support. That' s something else to know. So I' m going to just draw it in. That' s what I' ll typically do when I see a big jump like that. I' ll just draw it in here, and then notice what has happened here recently. It kind of floated back down to what should be the floor to support it, the support area, and it bounced up off of it, okay? So maybe that one' s a little bit easier to see for you. So you can see down here the volume, and I want to say when we' re seeing breakouts, breakouts above resistance, it' s nice if they have extra volume, and that' s why it s helpful to have the volume average down here.
So on this day, instead of being an average of 687,000, on that day it traded over 15 million shares. When you see lots of volume move in, that' s a little bit more convincing that maybe that breakout could be happening. Now, I want to redirect our thoughts here for just a moment. I want to take you back to the course because I want to show you where you can read up on these things that we' re talking about today to really reinforce and I love the testimonials that many times Wiley will put out in the chat, not even being solicited, where he ll say, hey, if you go look at the online course, it really helps the learning curve. Let' s go over to, where did my icon go?
There we go. We' re going to come over here. This is our Schwab demo account, and I want to show you again the path to go find the course. So up here at the top, this is just right after you log in what you see. Click on this learn menu right here, and then just CBD . id and then you bend this, and then it brings up these two steps is how you will be Ziploc . org. And just a little bit below it and to the right, it says Courses. I' m gonna select on Courses. We' re gonna go to the third course down, so I' m gonna drag. Oops, let' s see, where did it go? It did not go to Courses. I wonder if we just have a new little bit.
Okay, looks like maybe we have to select on it again right here. It looks like they changed the menu just a little bit recently. Alright, there' s the first course, the second course, third course, Stock Trading with Technical Analysis. Honestly, everybody should do themselves a favor and go through this course. Now I' m just gonna go in, and I just wanna point out to you, introducing technical analysis: what are the benefits and the risks of using it? And then it starts getting into the principles we' ve been starting to talk about, like trends, support, and resistance, trend and timeframe. We' ll spend some more time there. But this is where you go to find that information. And then I wanna point out to you again, this resource called the Stock Trading with Technical Analysis, Bull Flag Sample Investing Plan.
It is quite the mouthful, okay? Yeah, if I come down here to page three, and that' s where we' ve started several times, we' ve taken a look at the watch list criteria. This is the sample entry rules. So you have to understand some of these principles in order for the rules to make sense to you, all right? So here, it says we re gonna be looking for the support bounces or a resistance break, and sometimes, be common entry signals. We also could look for something called a CAHOL, which stands for a close above the high of loading; got a little acronym for it. Over in my scratch pad, and so we might look for that as an entry signal.
Another thing we might like to use this bull flag pattern is sometimes we' ll see it break out of the flag and I' m gonna draw a little picture for you so you can see what that means, okay? So this is the area we' re really focusing on here today. So if we' re looking to get in, we might look for a breakout above resistance, or we might look for a breakdown. We might look for a support bounce or a chart pattern, okay? This is where you' re gonna go find that information. Now, I want to, since I' m out in our browser, I' m gonna stop here for just a moment and remind you to, if you haven' t already, go ahead and subscribe to our YouTube channel.
In the bottom right- hand corner of your screen, you' re gonna see the little YouTube logo in blue. You want to go over there and you want to subscribe to our channel, which is the Trader Talks channel. Then when you do it, it makes it a lot easier for you to see what' s coming up. If you want to have it remind you and send you a reminder that this is the class that Coming up soon, okay? And then those of you, especially those of you that are new, we have some sections for you to be able to go and find a particular course. Most of them are the getting started with courses, okay? And so the ones for this class come down here. It says start here, okay?
So anybody that' s just learning these, where the basic principles are taught. Last time we went through a series, we parked all the versions here so you could just go and sequence, okay? It makes it easier for you to find the things you' re looking for. Alright, let' s jump back to our charts here. And I want to talk to you about what a CAHOLD is. For a CAHOLD, let' s look at a different stock here. We' re gonna look at, we' re gonna use Apple as an example for some things we may have seen in the past. And I have drawn on my chart here, and I' m just gonna zoom in, what a flag might look like. Now, a flag has a sharp run up.
This is kind of like a pop, pop, pop, all right, sharp vertical rise up. And so like say this area here, that' s not very black enough. Or dark enough. But going up here, you can see mostly it' s a pop, pop, pop, right? Kind of going up. And then we would call that the flagpole. And then we would say, when it' Consolidating when it gets in a little tight range and it quits popping, that creates a flag. And so I had actually had a couple pre-drawn here from a while ago. This one could have been a really long flag pole. Or somebody, if they were maybe not looking that long, they may have considered this little shorter. But this one, a smaller flagpole, that looks legit as well.
Cuz there was a little tiny break in here. But this area, this is what we call the flag area. Sometimes that flag might go straight across, and we call that a flag in a stiff breeze. This one is just kind of like a droopy flag, right? You hang it out and it droops a little bit. And then what we look for is we look for the stock to break out of that consolidation. And so say on this green candle, that probably was the day that it looked like, yeah, it' s breaking out. Now, if you' ve got a flagpole and a flag that' s kind of steep, the breakout might be just like over here. It doesn' t have to go past the top. Sometimes it might, like it really did actually in this situation.
But sometimes it won' t, all right? And you' re gonna get used to kind of seeing these. And you' re gonna be the one making the call, hey, did it break out here? Yeah, I think it did, or maybe you' re not quite convinced about it, okay? So that' s our flag. We have another principle that we call a CAHOLD. And that just stands for a Close Above the High Of the Low Day. You can see over here on my scratch pad, I' ve got it listed here. Feel free to take some notes: what it really means, what it' s an abbreviation for. And essentially what we' re saying is we may see a stock in an uptrend. We see a pullback. Sometimes it might be in a flag, sometimes it might not, okay?
And we look and see, well, in the pullback, right? Where did it go the lowest? And then we' re looking for the price of the stock to close higher than the high point of the lowest day in the pullback, like something here. So, for example, in the flag, maybe you haven' t learned about flags yet. But in the pullback, what day does it look like it goes the lowest? Probably this day here. Well, the high on this day was 190. 05. And so we would be looking this next day: hey, is it breaking out? Is it having a hold? We need the price of the stock to close higher than 190. 05. And we can just visually see, yeah, I did it on this day here.
Some people might not wait for the close of the day; they might, if it makes a big move, they might feel convinced that maybe they' ll take a move above the high of the low day and get in on something like that. It' s going to be up to you to decide. Some people might wait till the end of the day to really see if it' s going to close the stock there rather than getting in and maybe having this stock may not run up as high as it did first thing in the morning. OK. Next up, so we' ve talked about flags and entry points. Let' s look at something here, CPNG. Now, this is an interesting company here.
We can see it was in a down trend for a little bit of time, kind of hit some lows and started making higher highs and higher lows. What did it do here today? Boom! Man, that thing shot out. You can see. And I' m going to zoom in here so we can see better. Look at all that volume. And did it break above some resistance? Yeah, it probably did. There may have been an area of resistance, what, maybe at this $19 and some odd error and some change. OK. Some may have said, well, maybe this is resistance, because there' s maybe more hits there. And it could be that maybe it' s a little bit of a range, OK? Technical analysis is, it' s not a science.
It' s kind of an art form, right? You may see something a little bit different than I see it, OK? Doesn' t mean you' re wrong and I' m right or vice versa. Just means our interpretation of it might be a little bit different. Now as you look at this particular stock, you may go, well, the breakout. The breakout was today. But geez, Connie, it was 11 and a half percent. So some people might look at that and say, well, let' s see if the stock comes down and tests out the old resistance. And then some people might try to get in if it bounces off of that, which would now become new support, right? Old resistance becomes new support. Let' s take a look here. OK. OK.
So it' s going to go down. We looked at, at that' s not the right place. I want to show you. I' m going to show you. We looked at a bull flag. Just because you' re going to start seeing it, I want to identify this for you, OK? CBRL is what I want. Cracker Barrel. Maybe you have a Cracker Barrel by you. In any case, the moving average shows us, man, it' s been downward trending, kind of flattened out. out a little bit here but starting to drop again here and I just want you to see that we can have flags in an uptrend; we can have flags in a downtrend as well. Okay, so i if I were drawing the flag in here, let me go to my drawing tool; that might be a little bit better is I might see that steep drop and that little consolidation, and then breaking out of it again, boom, shoot a big drop!
And usually the height of the flagpole is what we might expect the move to be after it breaks out or in this case breaks down below that. So, the kind of movement we' re going to expect out of it so I want you to just be aware, gee, it can be on the bare, bare side as well as the bullish side right now. We' re really training our eyes you to look more bullishly, but there will be a point when you feel a little bit more comfortable with that, and then you' ll start to use your technical analysis to identify things in a bearish type scenario. Now I' m not saying we' re in a bear market yet or anything, but we' re starting to see a little bit of that weakness aren' t we?
Let' s take a look at this stock, Etn okay, Etn Corporation. Uh, you can see I' ve been from the past, I drew in maybe an area of what resistance we' ve got this 30-day moving average if it if your eyes are having a hard time figuring out trend have a hard time finding the higher highs and higher lows sometimes it' s helpful to just have the moving average there to tell you hey, the average is about this now as we look at etin the question might be well um. So what might we look for for an entry signal? There were not a lot of bullish stocks this week, especially not today. Wednesday and today were pretty heavy bearish days in the market. But this particular stock keeps making mostly higher highs and higher lows.
Now, I would say the previous low was right here at the bottom on this little low point on the shadow. And then here, it' s in a similar area. It went slightly lower. And what' s interesting here, it looks like maybe it' s bouncing off the moving average. So in this case, we might say, OK, here' s our pullback. What was the lowest day in the pullback? Well, it was this candle here two days ago on Wednesday. The high that day is 317. 37. Did it close higher than 317. 37? Oh, it was so close. It was 317. 27. So it didn' t quite do it. Well, does it do it today? We need it to close above 317. 37. And it does. It closed at 318. 50.
So technically, this would be our Hold Candle Day. And some people might use that as an entry. Now, does it mean you have to use it for an entry? Not necessarily. But I' m trying to give you lots of ideas that you might want to consider. And practice trading. And your paper money account. Now, the other thing I wanted to point out, too, was this RSI. And basically, there' s an area of, it goes from 0 to 100. OK, it doesn' t go higher than 100. And our key points here are 70, which is up on this top side. And then 30 down here. So if we see the line is maybe dropping overall, we' ll look for peaks and drops again.
Then we might get the idea that the momentum is starting to go more to the bearish side. Or it So, becoming weak, all right? So, during an uptrend, typically, we' ll see what we saw here. A lot of the time, it might be above this 70. We' d call that the overbought area. If it drops down below 30, like some of the bearish stocks you' ll be seeing, right? If they' re down below 30, they' re in an area that we would consider oversold. And sometimes, there can be negative consequences. And some of those are just a few of the limitations with those terms. But I would want you to think, OK, if it' s overbought, means buyers are in control. If it is down below 30 in that oversold area, we' d say the sellers are in control.
Now, I do want to do in every one of our classes, I want to at least do one example trade, OK? So we' re going to use some of the things that we' ve talked about today to set up that trade. Now, one thing we talked about, in previous weeks, is that when we get into a trade, we want to know where we need to get out. Maybe it' s at a point that we say, hey, if the stock really goes there, it' s not up for trending anymore, or it' s breaking down through support significantly, that we decide we don' t want to be in the trade anymore. And when you decide that up front, as you' re putting these practice trades in your paper money account, think of it at the time you' Re- doing it because if you' ll wait, sometimes it gets too emotional, especially if you' re a new trader.
You' re like, oh, should I put that stop in? You know, maybe I' ll give it a little bit more room, right? Emotionally, we don' t make very good choices, OK? But what we could do here, we could say, all right, it looks like the last time it came down was to this 30-period moving average. That value is over here on, well, actually, that' s not right. This is what the 30-day moving average is today at the close. So we' re going to go ahead and do that. But if I just came down here, it' s going to be pretty close to what the low was. So, the level here is 306. 21. And use our calculator, we' re going to go 3% below that. 3% gives it some wiggle room, OK?
Where we' re like, yeah, if it really goes there, we really want to be out of the trade. Because it could kind of wiggle around and maybe bounce off here again, right? So 306. 21 is the current value, and I' m going to multiply that by, 0. 97, OK? 0. 97 is the quickest way to get 3% below your number you' re looking at. So it says 297. 02. So I' m going to go put my mouse as close to that as I can. OK, that' s pretty close. 297. 30, or yeah, 297. 30. So if it really went there, yeah, it' s making a lower low. Could be the trend is changing, or maybe they have some bad news that might be changing the trend.
But in any case, we' re like, we don' t want to be in it anymore, OK? So this is where we' re going to put our stop value. Now, in a future week, we' re going to teach you about how much to buy, OK? Managing our risk, OK? For our purposes today, we' re just going to buy 30 shares, OK? Trade tab, click on the ask price. When I kind of was doing some risk management earlier on this one, that' s where I came up with the 30. We' ll teach you that another day. And then here, we got our CAHOLD signal. So we' re hoping we can get in close to what it closed at. So I actually might change this price to be $318. 50.
It' s a little bit high right now, artificially high, I should say. And then we' ll make it good for the day. Now, what I really should have done is I really should have done a right mouse click and said buy custom with a stop', OK? That actually puts two things up there together. So I' m going to take the time to do that. We' re going to change that to 30 shares again. And then you click on that little link. It' ll make sure that what we' re selling is 30 as well. And then we will change our price back here to $318. 50. I think I got an extra digit in there, $318. 50. And then we ll put in our stop price, $297.
02, $297. 02. There we go. It' ll trigger a market order if it gets to that price or lower. And we' ll make it good till cancel so we don' t have to go set it up every day. OK, that is going to be our trade example for today. And we may use some of these. We may use trades in future lessons. Just read through it, make sure it represents what you want. This lets us know, hey, if it hits that stop, it triggers a market order. It' s not a guaranteed price. We know that. And then we would go ahead and send it in. I' m going to send this to our getting started with stock investing bucket. OK, I need to check your chart; your questions over here that I haven' t looked at for a minute.
If you have any questions you need to raise right now, let us know. Because Scott can help me out here as well. And it looks like maybe Scott' s just been helping you out all along here. Thank you so much, Scott. All right. Next week, we are going to get into more technical analysis. There is such a lot to cover that we only can cover a little bit in one of our sessions and still show you some examples. So I' m going to encourage you to do a couple of things. One: Subscribe to the channel. Makes your life easier. And then number two, fill out that survey for us. We always appreciate when you take the time to do that. We really appreciate that as coaches. We read every single thing you write in.
In fact, Scott will be Scott' s the reader. He' s helping me here today, but he' s the one that actually gets that information. It' s totally anonymous. Nobody knows who submitted whatever, OK, unless you stick your name in there. Then we might be able to guess. But otherwise, yeah, it just helps us out. So I would encourage you to do that, OK? We started talking about some of the parameters and tenets of technical analysis and where to find that information. We talked a little bit about some entry points. I want to go into a little bit more detail on that next week as well as we look through some examples, OK? So what I' m going to encourage you to do is start marking up your charts, start drawing the horizontal lines.
I had no lines. If you feel comfortable with that, identifying, oh, maybe this was a breakout here because it broke above resistance. Oh, man, look, it broke through support right here and just start teaching your eyes. And by drawing the lines on the chart, they stay there. They' re not going to disappear. So the next time you pull it up, it' ll still be there, which is always very nice. It ll show up on your mobile device, too, if you' ve drawn something in there. So it' s time for the weekend. It' s time to turn you loose. I appreciate you being here today. We' ll be back here bright and early Monday morning, 930, right at the opening of the market. And so we' ll see you back then. Have a great weekend, everyone. Bye bye.
