06/02/2021 |
$ROKU Daily Candlestick Chart Case Study: Anchored VWAP, Volume by Price, and Seasonality
It was once said that all roads led to the wealth and prosperity of Rome; as today, does price action to points for profitable entities and exits along the Anchored VWAP on candlestick charts. There are few such technical oracles on technical charting software platforms which play out with such consistency as does the Anchored VWAP. When used on TrendSpider, with its accurate volume data and ability to adjust to any point in time of your choosing (relative to accurate volume data), you are among the vanguard of those who are trading like “they” trade…
In this case study, we will have a look at how the Anchored VWAP can be used for timely entries and exits on the $ROKU daily chart; with the Seasonality Widget used as a confirmation of potential price direction.
$ROKU Daily Chart
This is a daily chart of ROKU looking back since late January of 2021. This chart includes both an anchored VWAP and volume by price from the February highs, looking at supply and demand as the market topped out here and created lower lows afterward. This chart also shows a graph looking at historical seasonality since the IPO in 2017.
- This number shows where the volume-weighted average price (VWAP) and volume by price are anchored from. This point is where the market topped after the huge run back in January/February of 2021. At this point, the trend changed with the price experiencing lower highs and lower lows until the May 6th capitulation point.
- This number shows both the anchored VWAP from the May 6th capitulation point as well as the “volume shelf” that formed highlighted in green. This “volume shelf” is an area where there are multiple volume nodes showing a large amount of volume aggregating at the $310-$320 price level. This volume creates a base for price to “launch” off.
- This number shows the “volume gap” above once the price cleared the $320 level. This “gap” is a function of low volume above which is highlighted in orange. Notice there is a lack of volume nodes sticking out far to the left. This lack of volume allows price to move up very quickly through this area due to low liquidity.
- This number shows the next “volume shelf” and anchored VWAP from the February 16th reversal point. After the price is done moving through the volume gap, these are the next two levels to get through. This “volume shelf” can be looked at as a “breakeven supply” zone for anyone that bought early from around $350-$360. At this point, many shares are back to breakeven after dealing with a large drawdown to the $270 level. As shareholders sell at breakeven, this adds supply on the market and becomes a resistance zone.
- This number shows the historical seasonality tool on TrendSpider for ROKU since the 2017 IPO. As you can see, June, July, and August all have 100% win rates. This 100% win rate means that the month closed higher than the previous month 100% of the time since the IPO. For example, the monthly close for June has been higher than the May monthly close 100% of the time since September of 2017. If price can get through #4 (VWAP and breakeven supply), June could be setting up for a strong move both on the technical and seasonal side of things.
We hope that this case study helps to shed light on the funnel of profitably created by anchoring the Anchored VWAP to extreme swing highs and lows; revealing a channel in which price consolidates before its next big move. There are many kinds of trend analysis software offering Anchored VWAP, but TrendSpider is the only one that charts relative to accurate volume levels and price. This is what doesn’t come with FREE trading software. However, you can try TrendSpider out for FREE for 7 days to experience the difference in trading with smart automated tools for yourself here.
