Micro Stock Trader

Monday, January 13, 2025

Week 3 Trading Update: Detailed Assessment and Outlook

8-Step Stock Trading Plan Live Testing: Updated Week 3 Scenario (January 13–17, 2025)

As part of our ongoing live testing of the 8-Step Stock Trading Plan, we have updated our Week 3 scenario for URC. This update incorporates the latest price action and chart patterns from the past 30 days, along with the results of our trading activity on January 13, 2025. Below is a detailed description of the updated scenario, how it aligns with current market behavior, and the strategies we plan to implement.

URC daily chart showing the updated Week 3 scenario, with key support at Php77.07, resistance at Php80.70, updated stop-loss at Php73.80, and target zones.

Description of the Updated Week 3 Scenario

Key Support Levels:
- Probable Support Level: Php77.07
- Updated Stop-Loss Level: Php73.80
  These levels have been revised based on the intraday low of Php73.80 recorded on January 13, indicating a potential bottom and temporary support.
Key Resistance Level:
- Probable Resistance Level: Php80.70
  This level remains critical, as it has been repeatedly tested without a successful breakout.
Target Zones:
- 1/3 Zone: Php85.00 (Next upside target)
- 2/3 Zone: Php95.00 (Mid-range profit-taking zone)
- 3/3 Zone: Php104.40 (Final profit-taking zone)

The updated scenario anticipates a possible breakout above Php80.70, with potential upside toward the 1/3, 2/3, and 3/3 zones. However, it also accounts for downside risk by adjusting the stop-loss to Php73.80.

Justification Based on the Past 30-Day Price Action

Consolidation Phase:
Over the past 30 days, URC’s price has been consolidating between Php77.07 and Php80.70, showing repeated tests of both support and resistance levels. This range-bound movement validates the revised support and resistance levels.
Multiple Tests of Key Levels:
- The support at Php77.07 has been tested several times and held strong, reinforcing its significance.
- The resistance at Php80.70 has also been tested but remains unbroken, indicating persistent selling pressure at this level.
Intraday Volatility: The significant dip to Php73.80 on January 13, followed by a sharp recovery, suggests that buyers stepped in at lower levels, preventing further downside. This justifies setting the stop-loss slightly below Php73.80.

Overall, the updated scenario remains closely aligned with recent market behavior and incorporates new data from the latest trading sessions.

Expectations for Week 3

Bullish Breakout Above Php80.70: If the price breaks above Php80.70 with strong volume, we expect a rally toward the 1/3 Zone (Php85.00). This would signal a bullish trend and open the possibility for further upside toward the 2/3 Zone (Php95.00).
Continued Consolidation Between Php77.07 and Php80.70: If the price fails to break above resistance, we may see continued range-bound trading. Patience will be key in this scenario, as we wait for clearer signals before making further trades.
Breakdown Below Php77.07: If the price breaks below support, it could retest the Php73.80 level. A breakdown below Php73.80 would invalidate the bullish outlook and require a defensive strategy.

Updated Strategies for Week 3 Using the 8-Step Trading Plan

Step 1: Identify the Market Phase

Current Phase: Consolidation, with potential for a breakout or breakdown.
Action: Closely monitor the price action near the Php80.70 resistance and Php77.07 support levels.

Step 2: Position and Location

Position: The price remains below both the 20-MA and 200-MA, indicating a bearish overall position. However, a bullish reversal is possible if a breakout occurs.
Location: The price is near key support levels, making it an attractive area for potential entries if bullish signals appear.

Step 3: Assess Power Bars

Look for green power bars or narrow range bars near resistance, which could indicate a potential breakout.

Step 4: Entry

Enter long positions if the price breaks above Php80.70 with strong volume.
Alternatively, enter near Php77.07 if bullish reversal signals appear.

Step 5: Place a Stop-Loss

Use the updated stop-loss at Php73.80 to limit downside risk.

Step 6: Color Change

Watch for a color change from red to green near key support or resistance levels, signaling potential trend reversals.

Step 7: Profit Take

Take partial profits at the 1/3 Zone (Php85.00) if the price reaches this level.
Further profit-taking can occur at the 2/3 Zone (Php95.00) and 3/3 Zone (Php104.40) if the bullish trend continues.

Step 8: Re-entry

Re-enter positions on pullbacks to support levels if the breakout sustains and the trend remains strong.

Conclusion

The updated Week 3 scenario reflects our commitment to adapting our strategy based on real-time market behavior. With the revised support, resistance, and stop-loss levels, we are well-positioned to respond to either a breakout or continued consolidation. Our strategy for the week focuses on closely monitoring key levels, executing trades based on confirmed signals, and managing risk effectively.

We will continue to update you on our progress as we move through Week 3. Stay tuned for further insights and results from our live testing of the 8-Step Stock Trading Plan!

Disclaimer: This post is for informational purposes only and should not be considered financial advice. Always do your own research before making any trading decisions.

Friday, January 10, 2025

Rebalancing Our URC Position: Preparing for the Breakout While Managing Risk

Adjusting Our Allocation to Manage Risk and Capitalize on Upcoming Market Opportunities

As part of our ongoing trading activities using the 8-Step Trading Strategy, we made a strategic decision today (January 10, 2025) to rebalance our URC position. This move involves reducing our allocation from 70% to 65%, with a target of 40% ahead of Week 3 under the right conditions to manage risk effectively while maintaining enough exposure to benefit from a potential breakout.

Why We’re Rebalancing

The decision to rebalance our URC position was driven by current market conditions. Over the past four trading days, the price has been consolidating between Php77.07 (support) and Php80.70 (resistance), showing signs of market indecision. While our 1/3 Zone Action strategy typically recommends adding to positions in this zone, the absence of a confirmed breakout above resistance prompted us to take a more cautious approach.

By initially reducing our allocation to 65%, with plans to further lower it to 40% under the right conditions, we achieve two key goals:

Risk Reduction: Lowering our exposure reduces the potential downside if the price fails to break above resistance and reverses further.
Capital Flexibility: Freeing up capital positions us to act decisively when a confirmed breakout above Php80.70 occurs, allowing us to add back to our position in line with the strategy.

Aligning with Our 8-Step Strategy

Although this move represents a slight deviation from the rule of adding in the 1/3 Zone, it remains consistent with the broader principles of the 8-Step Trading Strategy. Our focus on risk management and maintaining capital flexibility ensures that we stay prepared for future opportunities while protecting the portfolio from unnecessary risk.

Key points of alignment:

Step 4: Entry — We will be ready to increase our allocation once the breakout is confirmed with strong volume.
Step 5: Place a Stop-Loss — Our current stop-loss remains at Php75.85, ensuring downside protection for the remaining position.
Step 7: Profit Take — If the breakout occurs, we will target profit-taking in the upper zones, specifically at Php85.00 (1/3 Zone), Php95.00 (2/3 Zone), and Php104.40 (3/3 Zone).

Preparing for the Breakout

Our analysis indicates that a potential breakout could occur within the next 3 to 5 trading days, provided certain conditions are met:

The price must approach and close above Php80.70 with strong volume.
Volume should increase significantly during the breakout, signaling renewed buying interest.

Until these conditions are met, we will hold our 65% position and adjust further as needed and continue to monitor the market closely. If the breakout materializes as expected, we will be prepared to add back to our position and capture the upward momentum.

Next Steps

Continue monitoring the price action near the resistance level of Php80.70.
Be ready to add back to our position upon confirmation of a breakout above resistance with strong volume.
Maintain our stop-loss at Php75.85 to protect against downside risk.
Target profit-taking at key levels as the price moves into the upper zones.

Conclusion

Rebalancing our URC position is a strategic move aimed at balancing risk and reward while staying prepared for a potential breakout. This adjustment ensures that we remain flexible, disciplined, and aligned with our overall trading strategy.

We will keep you updated on further developments as the market progresses. Stay tuned for our next update!

Disclaimer: This post is for informational purposes only and should not be considered financial advice. Always do your own research before making any trading decisions.

Evaluating the URC Trading Strategy: Week 2 Performance Review Using the 8-Step Approach

As Week 2 concludes, it's time to assess the accuracy of our scenario modeling and update our expectations for the upcoming week. Our goal throughout Week 2 was to monitor key support and resistance levels, manage risk effectively, and remain prepared for a potential breakout. Here’s a detailed summary of how our scenario played out and what we can expect moving forward.

URC daily chart ending January 10, 2025, illustrating consolidation below Php80.70 resistance with key levels marked, including the demand zone at Php77.07

URC daily chart as of January 10, 2025, showing price consolidation below Php80.70 resistance and support holding at Php77.07 to end Week 2 trading

Final Week 2 Assessment (January 6–10, 2025)

Key Observations from Week 2 Trading

Consolidation Below Resistance:
The price consolidated between Php77.07 (support) and Php80.70 (resistance) throughout the week. Despite multiple tests of the resistance level, the price failed to break above Php80.70, signaling persistent selling pressure at higher levels.
Support Held Strong:
The demand zone around Php77.07 was tested multiple times, particularly on January 8 and 9, with lows of Php77.35 and Php76.40, respectively. Each time, the price rebounded, confirming this level as a reliable support zone.
Volume Remained Low:
Volume was relatively low compared to previous periods of high volatility. This lack of significant volume contributed to the market’s inability to push through resistance, resulting in continued consolidation.
Stop-Loss Not Breached:
Our stop-loss at Php75.85 remained intact throughout the week. The lowest price recorded was Php76.40, ensuring that the position was never at risk of being stopped out.

Comparison with Week 2 Scenario

Our Week 2 scenario accurately projected key technical levels and market behavior. Here's how the actual outcome compared with our expectations:

Aspect	Scenario Expectation	Actual Outcome	Accuracy
Demand Zone Support (Php77)	Price expected to find support here	Price repeatedly tested and rebounded from Php77	High
Resistance (Php80.70)	Anticipated breakout above resistance	Resistance was tested but not breached	Moderate to High
Stop-Loss (Php75.85)	No breach expected	Stop-loss was not breached	High
Breakout Timing	Expected within Week 2	Breakout has not yet occurred	Moderate

Overall Accuracy Rating: 8.5/10

Strengths:
- Accurate identification of key support and resistance levels.
- Effective stop-loss placement, ensuring risk was managed without prematurely exiting the position.
- Correct anticipation of a consolidation phase between Php77.07 and Php80.70.
Areas for Improvement:
- Breakout timing was overly optimistic. The breakout did not occur within Week 2 due to insufficient volume and market hesitation.
- Greater emphasis on volume as a breakout indicator could improve future timing accuracy.

Updated Breakout Expectations for Week 3

Given the current consolidation pattern and low volume, we are revising our breakout expectation to occur within Week 3, specifically between January 15 to 21, 2025. Here’s what we’re watching:

Key Resistance Level: Php80.70
- A breakout above Php80.70 remains critical. For confirmation, we need a strong daily close above this level with significant volume.
Volume Increase
- A noticeable increase in volume will be a key indicator of renewed buying interest. Without this, the price may continue to consolidate or even retrace toward support.
Support Levels
- The demand zone at Php77.07 remains a reliable support. As long as the price holds above this level, our bullish outlook remains valid.
Stop-Loss
- Our stop-loss at Php75.85 remains unchanged. This level ensures that we limit downside risk while allowing the trade enough room to develop.

Next Steps

Continue holding the current position at 40% allocation.
Monitor for a breakout above Php80.70. If confirmed with strong volume, we will consider adding back to our position in line with our 1/3 Zone Action strategy.
Maintain the stop-loss at Php75.85 to protect against downside risk.
Prepare for profit-taking at key levels in the upper zones:
- Php85.00 (1/3 Zone)
- Php95.00 (2/3 Zone)
- Php104.40 (3/3 Zone)

Conclusion

Week 2 provided valuable insights into market behavior, confirming the accuracy of our key level predictions while highlighting the need for flexibility in breakout timing. As we move into Week 3, our focus remains on monitoring the resistance level at Php80.70, managing risk effectively, and staying prepared for a potential breakout.

We will continue to keep you updated on further developments as they unfold. Stay tuned for our next post!

Disclaimer: This post is for informational purposes only and should not be considered financial advice. Always do your own research before making any trading decisions.

Pages

Monday, January 13, 2025

Week 3 Trading Update: Detailed Assessment and Outlook

8-Step Stock Trading Plan Live Testing: Updated Week 3 Scenario (January 13–17, 2025)

Description of the Updated Week 3 Scenario

Justification Based on the Past 30-Day Price Action

Expectations for Week 3

Updated Strategies for Week 3 Using the 8-Step Trading Plan

Step 1: Identify the Market Phase

Step 2: Position and Location

Step 3: Assess Power Bars

Step 4: Entry

Step 5: Place a Stop-Loss

Step 6: Color Change

Step 7: Profit Take

Step 8: Re-entry

Conclusion

Related Readings

Friday, January 10, 2025

Rebalancing Our URC Position: Preparing for the Breakout While Managing Risk

Adjusting Our Allocation to Manage Risk and Capitalize on Upcoming Market Opportunities

Why We’re Rebalancing

Aligning with Our 8-Step Strategy

Preparing for the Breakout

Next Steps

Conclusion

Related Readings

Final Week 2 Assessment and Updated Breakout Expectations for Week 3

Evaluating the URC Trading Strategy: Week 2 Performance Review Using the 8-Step Approach

Final Week 2 Assessment (January 6–10, 2025)

Key Observations from Week 2 Trading

Comparison with Week 2 Scenario

Overall Accuracy Rating: 8.5/10

Updated Breakout Expectations for Week 3

Next Steps

Conclusion

Related Readings

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