Diary of a Financier

Interactive Brokers: Visualizing an entry point

In Capital Markets on Thu 25 Jul 2013 at 14:01

I wanted to record my take on Interactive Brokers’ ($IBKR) technicals, after I discussed much of the fundamentals and storyline earlier this week. IBKR has passed my quantitative and fundamental screening process, so now I’m poaching for an entry point.

I don’t think I’d lose money in 12-months were I to buy IBKR today ~$16.30. I said I wanted to buy IBKR on a pullback, and it’s now >$1 off its $17.43 high, but the chart is telling me to wait for an even lower entry point.

The daily fractal is governed by a Cup & Handle, which began this pullback upon reaching rim resistance ~$17.5. IBKR daily/weekly/monthly Aided by 1x bear divergence, C&H 1st support lies lower ~$15.8 (61.8% Fibonacci retracement) and 2nd support $15.3 (50% Fibonacci). I’m not sure which will end up being the absolute bottom to this drawdown, but I will start buying at the $15.8 1st support, assuming indicators and intraday fractals show preliminary signs of bull reversal. The former is -3% lower than today’s intraday levels, the latter -6%; that’s why I’ve decided to refrain from opening the position until I get a buy signal at 1st support, saving myself at least 3% downside and maybe 2-weeks of carrying the dead-weight.

The longer term charts are bullish too. The weekly charts shows June’s breakout from a symmetrical wedge having held a retest of resistance-cum-support. A bull reversal out of MFI’s bear trend would confirm the move, representative of buyers’ volume coming in to sustain the trend.

Monthly indicators are strongly bullish, with long term 2x bull divergence and a stochastic at 70% & rising.

–Romeo

N.B. I will do my best to disclose any trade activity in my trade reconciliation, but please read my disclaimer too.

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