keifer

UUU Potential for Good Return

Long
AMEX:UUU   Universal Security Instruments, Inc
Hello,

What is UUU?
USI ( Universal Security Instruments , Inc. ) makes the most innovative home protection solutions available today. Since our founding in 1969, we’ve become one of the largest manufacturers of smoke and carbon monoxide alarms in the world. We hold 11 patents on detection technologies, based on our proprietary research into the science of fire and fire detection. Our state-of-the-art production facilities are ISO9001 certified, and we’ve gained approval to distribute smoke and carbon monoxide alarms in more than 30 countries.

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My Thoughts For You
I have been asked too many times about getting into the trade, profit-taking, stop loss, etc. I only do the charts expecting that most know and have their own rules regarding their own personal trade set-up. I would advise that if you don't know about positions and risk that you study risk/reward, profit-taking, trends/ trendlines , risk management, support/resistance , entry/exits and any kind of TA to understand the price action because reading a chart isn't enough to teach you that.

Not all charts are bang on, they are rather predictive of what the market should do but markets are not predictive but rather you must learn how to react to the market for where the market wants to go. I use TA that is pretty good at being predictive but I have been wrong and will be wrong again. I do have an edge over a flip of a coin and that is experience, education, hard knocks, and practice.

My Trade Advice For You
When I present a chart, that does not mean get in now. Getting in requires a set of rules and I will try to explain that in simple terms.

A) What you need to do first is to understand the trend. Is it a bear or bull market? The direction is key by looking at the monthly, weekly, and daily time frame. You look for support and resistance within these timeframes and by understanding the trend, you can then decide if we are going to test these areas in a short or long position. Knowing the support/resistance areas, you can then assume that price will test these areas 1) Daily, 2) Weekly, 3) Monthly however you most know that the daily can affect the weekly or weekly affect the monthly and reverse. That is why you always look for the direction of the market first.

B) Trendlines are drawn horizontally and diagonally by using a drawing tool to place on the tops of the candles for resistance and at the bottoms of the candles for support. This is how you find support and resistance on different timeframes.

C) When getting into a position, this is where you need to have your rules in place. Entry into a short/long position is done on the 4-hour chart. Your tools will be the RSI and Fibonacci Retracement Tool. a) we now know the trend b) we know the probable areas of where the price is going, c) now we need to know when and where to get in

D) Using our fib tool we are looking at the 4hr chart and will measure the previous impulse to find where this correction will occur. Here is an example but done on the monthly chart. We see that resistance was just above the golden ration (.618%) then we had a retest (rejection) near the golden ratio. On a 4hr chart, you would have seen the entry point and would have placed a stop at the golden ratio. Here is a look at the fact on a 4hr chart.
We also use the RSI for further confluence for our entry position. Are we overbought or oversold? Overbought, you want to think about a Short and oversold, you want to think about a Long. Using the RSI and the Fib tool with the foreknowledge of the trend we are better equipped for making an entry. Here is an example of the RSI along with the fib tool.
Summary
1) we know the trend direction, 2) We know support or resistance for where we will want to enter a position, 3) we used our Fib Tool and the RSI to help us make a decision for entry 4) we waited for the retest and rejection and found an entry on the forth rejection where the RSI was at overbought territory. 5) we placed a stop just beyond the reach of any spikes that may occur.

I hope this information will help those who don't have a clear understanding of the when, where, and how to get into a position. Taking profits is another story but I can tip you this. Measure the previous impulse and go with the 1.272 or 1.618, this all depends on where that measurement will take you...ask your self, will it test support or resistance with that measurement. Here is an example of taking profit on the 4hr timeframe.

Good Luck, Cheers!

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