MCP Follow Up

MCP is one of a handful of Core/Trend long positions I really like, this one still in a stage 1 base, but should make fro an excellent trending stage 2 trade that could last quite a long time, I'm thinking primary trend and that's why I like to keep MCP as a core position and not worry about it, even though once in a while it also is a nice trading vehicle.

I have a feeling it may see a little softness in price soon, I think that would be a fantastic opportunity to start a long position or add to one. I don't think I would sell or even lighten the MCP position, but it is something you should be on the lookout for.

Here are the charts and you'll notice a 180 degree difference between MCP and the broad market.

 Daily MCP, note the two head fake moves, one larger on a failed breakout of the rectangle base/range and then a 4-day range on top of support, this would look like a great buying opportunity to most Technical traders as MCP pulled back from the first head fake move and stopped at support (former resistance), any breakout from that range would be an ideal buy from a Technical Analysis point of view. We got a breakout the very next day from a defined range and that was a head fake move as well, catching new longs in a bull trap and then MCP reversing to the bottom of the range fairly quickly, this is classic head fake move material. Now we are once again above the longer term range, but if you look at the last 3 daily candles after the initial breakout the first is a bearish Shooting Star, the second is close to a bearish Hanging Man and today's is a star in the middle of yesterday's body making it a bearish Harami reversal, all 3 days have bearish candles and we aren't very far above former resistance or the range, a pullback here would not be surprising, but I do think it would be a gift.

The X-Over Layout is meant to be more of a trend layout and I'd prefer use it on a daily chart rather than a 60 min, but 60 min is the only trend we have. Note the buy signals confirming in the white boxes, the problem here is the moving averages are too close to price to be effective pullback targets, but then again it doesn't look that bad, but there are some signs so if you are interested in MCP, I might set some price alerts to notify you of a pullback.

 The 1 min chart with a leading positive to the left as MCP broke out of the range again, but since it has gone leading negative. While the divergence itself looks really bad, keep in mind it's an intraday 1 min chart so the size of the distribution is not that serious.

At a 5 min chart we see the same accumulation area as above, a stage 2 mark-up cycle with 3C confirmation and a very weak relative negative divegrence out to 5 mins so I don't see any real distribution here, but it does look like a pullback is at about 70% probability and I think a pullback would be a great entry that is a better price and lower risk.

The longer term shows the accumulation in MCP-60 min - and the leading positive divegrence as well as a larger "W" bottom.

The daily chart also shows a downtrend with 3C confirming the trend and a switch as it ranges to a leading positive on a weekly chart, the divergence may not look as impressive as the 60 min chart above, but the accumulation size difference between a 60 min chart and a weekly chart is enormous. For these reasons, the probability of a pullback being constructive/accumulated are probably in the 90+% area, thus it's a market gift if it materializes so if you are interested, I'd set price alerts to make sure you don't miss it.

*Note the difference between MCP's charts and the broader market, night and day.