Category Archives: AUDNOK

AUDNOK Daily – Not Mainstream

The Cross Pair Analysis service covers a large number of non-US Dollar vehicles on an ongoing basis. One of the more unusual ones in our sights is the AUDNOK – which over the years has shown a tendency to trend well for long periods. Chart 1 shows the recent Daily moves in the pair without any annotation – it looks as though price is moving in a fairly horizontal range but I think most would accept that this would be somewhat difficult to trade.

Chart 1

audnok-daily-chart1

By establishing a path of price and monitoring the strengthening and weakening of trend, Median Line Analysis allows traders to analyse and profit from a vehicle using high probability and low risk entries.

Chart 2 shows the same AUDNOK Daily but with a pitchfork added. I have used the significant late July low as my A pivot and the next significant high and low as my B and C. All of a sudden the chart “comes to life” and numerous supports and resistances become apparent. Our brains are constantly looking for patterns in what we see around us and drawing a pitchfork gives context and makes sense of the movements of price.

Chart 2

audnok-daily-chart2

In order to determine that we have indeed found the correct path of price we need to see activity along the angle of the pitchfork that we have drawn. This does not have to be along the main lines of the fork itself but it does have to be in the angle of ascent (or descent in the case of a downfork). Here there are a series of resistances along the arrowed Sliding Parallel just under the Median Line of the fork. These would alert us to the probability that we were correctly defining the path of price – we would watch the continuing action along the lines of the fork, building a picture of likely areas of support and resistance. Further confirmation would come from the last two red arrows in the line of the Quartile and this is so even though price had dipped beneath the Lower Parallel of the fork in the area of the puce circle. Remember it is the angle defined by the fork not the fork itself which is important to the methodology.

The dip to the puce circle in early March led us to draw a Sliding Parallel – again shown here in puce – from that point as a potential line of support. When price revisited that line a couple of months later we were watching it as a potential area of support. as is apparent form the puce arrows the anticipated support held and also gave traders the opportunity to take a long position with the benefit of a tight stop – for example by going long from 5.4877 at the second arrow with a stop beneath 5.4841at the first arrow.

As price moved away from this line of support a trader would probably move his or her stop to breakeven in order to use “the market’s money” in the trade. The two green circles show a bullish context as potential resistance along the underside of the Lower Parallel turns into support. As on the horizontal, when resistance becomes support we look for price to move higher. This is precisely what has happened with it now reaching an area of anticipated resistance in the larger green circle at 5.7890. Not only is this horizontal resistance as shown by the green line but also resistance in the line of the fork along the Quartile. The last two red arrows show that this was the previous line of resistance in the fork and, if the strength of trend was the same, we would anticipate that this would again be the line of resistance to watch.

Having moved from anticipated support to anticipated resistance I hope that I have shown how the methodology can be of use in analysing and profiting from the moves in a chart. I will continue to monitor the way trend is strengthening and weakening in the angle of the pitchfork that I have drawn.

The Cross Pair Analysis service uses Median Line Analysis to cover a dozen non-US Dollar pairs on a daily basis, looking at context via Weekly and Daily charts and in detail via 240, 60 and, sometimes, 20 minute ones.

I recently hosted a webinar looking at the Cross Pairs – it is available to watch at this link:
http://www.coghlancapital.com/node/8759

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