Float Turnover Formations A Graphic Collection

THE EIGHT BASIC
FLOAT TURNOVER FORMATIONS
A GRAPHIC COLLECTION
IN 
SEQUENTIAL ORDER

1. Float Turnover at Bottoms
(also known as a Simple Breakout)
These are the most deceptive and the hardest formations to make
money on.  The descending top float channel line is best viewed as
first and foremost--a line of resistance,  and thus breakouts can easily
roll over and head south.  (The one big exception is when breakouts
occur on exceptionally big volume but even then it can lead to a downside
reversal.)  Never the less, they are VERY instructive in understanding where
the Smart Money buys at long term bottoms and in deep corrections.  There are at least seven types of bottom formations.  See an Example.

2. Support at the 50% Float Channel Line
(ABC LONG Float Set-Ups)
These are very reliable at the beginning and middle of bull markets.  As a bull market matures more and more stocks will drop below the 50% float line and try to find support at the lower float channel line.  See an Example.

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3. Support at the Lower Float Channel Line
(Overhead Support)
Many of the biggest moves start with a deceptive sell-off down to the lower float channel line.  This is one of the best places to find excellent entry points with the best risk to reward money management.  The theory here is that stocks that have gone sideways long enough to come down and just 'kiss' their lower float channel line are in a distribution/re-accumulation phase.  This is where investors who bought lower are selling to those at the new higher level.  If the new ownership above the 'kiss' are holding their shares tightly then the price often moves higher very quickly.  See an Example.

4. Float Turnover In A Correction
(Distribution / Re-Accumulation)
After making a good move to the upside, stocks go through 'corrections.' In a correction, prices either go lower or sideways.  Many times the sideways corrective action corresponds exactly with the stock's float turnover.  There are several types of sideways formations.  Some see the top float channel drop a little and others see it drop a lot.  See an Example.

5. Top Formation
Breakdown Below A Float Turnover

Like the Float Turnover Bottom Formation (See #1 Above), these are very deceptive and hard formations to made money on.  The rising lower float channel line is best viewed as first and foremost--a line of support, and thus breakdowns can easily turn higher and head north.  Never the less, they are VERY instructive in understanding where the Smart Money sells and the Dumb Money buys at long term tops.  There are many varieties of top formations.  See an Example

6. Resistance at the 50% Float Channel Line
These are very reliable at the beginning and middle of bear markets.  As a bear market matures more and more stocks will move above the 50% float line and try to breakout above the top float channel line.  See an Example

7. Resistance at the Upper Float Channel Line
Many of the biggest downside moves start with a deceptive run-up to the upper float channel line.  This is one of the best places to go short with the best risk to reward money management.  See an Example

 8. Breakdown Below a Float Turnover
in a Consolidation.
Stocks that are already in down trends may go sideways for a while.  This sideways action is known as a consolidation and often is the length of a float turnover.  This is also a good place to go short.