r/PierresLongTermCharts

chart by r/PierresLongTermCharts

I was asked to have a look at Nike as a possible long term buy....

What would you do??

Always always look at the chart before even dreaming of buying.

If you going to invest in stocks or etf's, you must learn to just have a look at price movement first. And the best way is to put up a chart.

But instead of using a daily timeframe, change it to a weekly one.

Then use a candlestick format. You can see more information. And emotion too. Green candles are good up weeks and red ones are bad down weeks.

And then all you do is add a simple moving average, to your chart. Most charting sites come with this indicator.

Change the parameter to 30 and i use a blue one.

Promise yourself to never buy when the price is UNDER the sma, like it is here.

Why?

Because the price is falling. And you never know how far its going to fall.

Rather look for the price to be firstly, above the blue sma.

Then look for the sma to at least have flattened out. (see up arrow "A")

Then look back for previous peaks or some sort of high.

Draw in a line there. (see my two down arrows)

If and only if the price manages to rise above the line, does one start looking to buy.

In this case, the price couldn't even get to the line.

So you do not buy.

And look what happened.

The price fell back below the sma and eventually below an old low too.

The long term trend is very much DOWN.

Stay away for now.

Can you see what I mean?

chart by r/PierresLongTermCharts

Using this system can make your life a lot easier.

Change the timeframe to a weekly one. Each candle here takes a whole week to form.

Add a 30 parameter simple moving average (sma) to the chart. Mine is seen here in blue.

Stay in the investment, while the price is above the sma.

If the price does happen to fall under the sma, let it make a little low and rise again.

Draw in a line under the low. This is your support line.

If the line matches up with another low, even better. More buyers around.

If the price falls under the line, its time to exit. Why? Because more sellers around now. They pushing the price down.

Note the price is still under the sma.

Never ever buy when the price is under the sma.

You can hold these if you have them, while they above the line, or you can sell off half of your holdings.

But when do you buy?

You only buy if you see the following:

Price above the sma.

Sma is flat or rising.

Price rises properly above a previous peak, or even better peaks.

Thats not so hard is it?

chart by r/PierresLongTermCharts

This is purely for educational purposes only. Its NOT advice.

Lets run through it.

Can you see how we got to our buy point?

Once the 30 week sma starts rising, look back for a peak or even better matching peaks.

Draw in a line at the top of the peaks.

If the price closes above the line, thats your buy signal.

You'd already be up over 21%.

While its above the rising 30 sma, you simply hold.

And now it has reached another resistance area.

Its made a peak and pulled back a bit.

I have drawn in another line, that matches up with another peak made ages ago. (see 2 x down arrows)

I have called this line a neckline.

We now have a possible inverse (upside down) head and shoulders formation in the making.

Remember - only buy if the price closes above that neckline properly. Just like it did earlier, first buy opportunity.

With this type of formation, one can get a possible, probable target price.

You can measure up from the bottom of the head, up to the neckline, and then add that same measurement to the top of the neckline, where it breaks up out.

This does not always work out, but its amazing how often it does.

My target is roughly 3864

Wait for the break, before buying.

Lets hold thumbs for this one.