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Price of a share moves as a wave contracting and expanding alternately .So,the expansion in price always follow a contraction in price and it is a great point for an entry.An easy way to find it is to use three moving average that contract very close.
When the stock break out of this contraction, most of the time it make a leap in one direction. It often provide chance to rise the stop loss level in to break even point and take a profit early.
The idea behind this is got from the "ULTIMATE TECHANICAL ANALYSIS HAND BOOK" issued by Elliottwave International. The hand book recommend 9 days,21days and 34 days moving averages which are fibonnacy numbers. But I have included only 9 days and 34 days in this watch list as the 21 days sma come in between other two on contracting periods.
It also filters for that share that has an average range of 10 point for an average of 21 days as it swing traders may also benefit it. Since this work best in trending market, another filter for ADX is also included.
Watch this share in a chart with above ema plotted.
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