Study the Eight Formations

Here's the Basics...
The floating supply or float are a company's shares that are actually available for trading. They are the shares outstanding minus what the management owns.  Float turnovers are created by adding up trading volume cumulatively until the total is equal to the number of shares available for trading.  To see a stock's current float turnover, a gray box with two red lines is created.  This is accomplished by adding the daily trading volume cumulatively into the past until the cumulative total equals the float number.  The highest and lowest prices in the backward count are the two red lines and the box is shaded gray.  The gray box with two red lines is more simply known as the Float Box.  Think of float boxes as the shortest amount of time that a stock can go through a complete change in ownership.  They represent a hypothetical turnover in the ownership of the float.  Float Boxes can be found at all long term and short term bottoms and tops.  The idea being that at bottoms the float is accumulated and at tops it goes through distribution.  A stock's current float box on an end of day float chart is similar to a moving average in that it has to get recalculated and re-plotted every day.  Thus the current float box is always positioned to the far right on the chart. 

Float Channel Lines...understanding them is crucial
To see were the float box traded in the past, float channel lines are created by plotting the upper right hand corner and the lower right hand corner of the float box on a day to day basis. Think of float boxes like boxcars on railroad tracks.  To see where the float box was in the past the box can be moved backward along its float channel 'tracks'.  By using 1/4, 1/2, and 3/4 of the stock's float number, we can add float channel lines that correspond to 1/4th of the float, 1/2 of the float and 3/4ths of the float.  A thorough study of the archive below reveals that support and resistance points correspond to these float channel lines.  There is nothing magical about this.  All stocks that are moving higher will naturally pull back during their upside move.  Float channel lines are a way to see the degree of the pull back.  The strongest stocks have mild pull backs (25% float channel Line).  Less strong stocks have normal pull backs (50% float channel line)  Deeper pull backs will find support at their lower float channel line (100% line)

(Please note: The only software that allows the user to move the float box backwards over its float channel lines and to create the 1/4, 1/2 and 3/4 float channel lines is the StockShare V2 technical analysis trading software.)

Bottoms...not for beginners
Beginners will find Float charts to be quite deceptive!  It took Steve over a decade to figure out how to use them effectively.  Bottom formations and top formations are the most deceptive of all.  It is very easy to lose money buying breakouts at what you think is a bottom.  And yet after they occur, float turnover bottoms are excellent for teaching the most basic principles of float charts.  Simply put a float turnover at a bottom is the place were the Smart Money buys right at the bottom.  In every chart listed under "Bottoms" below, you'll find a float box at the bottom.  Everyone will also have a breakout above the float turnover at the bottom.

Bottoms

Up - Trends

Support at the 50% Float Channel Line
(ABC LONG Float Set-Ups)

Support at the Lower Float Channel Line
(Also known as Breakdowns that Fail or
Overhead Support Formations)

Corrections
(also known as Pull Backs or Retracements)_

Tops