Supply Tool Upgraded

[Pascal]

We just upgraded the Supply tool, in order to separate the loss cutting selling activity from the profit taking selling activity.

Loss cutting activity is usually more violent and could quickly push prices down.
NFLX is in great danger here (just at 10%.) GRPN went under (Supply much higher than 10%) , but AA is doing fine (Supply higher than 10%, but in the green zone. This means "buy on a pull back to $9., the 10% level")


Pascal

[JoeLo]

Is the best buy point at the 10% line for any given stock or at the cross of the two curves at the bottom?

[Pascal]

Is the best buy point at the 10% line for any given stock or at the cross of the two curves at the bottom?

Joelo,


The Supply figure shows how eager shareholders are to sell their stock depending on the price.
Whenever the supply is lower than 10%, it means that few shareholders are ready to sell. The lower the supply Figure, the better.

This Supply level must be combined to the EV pattern. If you see a strong stock that is pulling back in price back down to the <10% supply level with EV showing that large players are not selling, then there is a good probability that the price will bounce.

You can see below that CIEN and DRI are showing this type of patterns.


Pascal