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FloatCharts.com
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September 30, 2006
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On Friday, September 29th, USA Truck blasted higher and ran into resistance right at its upper float channel line. This is the first time in about 9 months that USA Truck has touched and tried to get above its upper float resistance line. This is a great example of how a descending upper float channel line acts a resistance point. Technically the gap that was made on Friday should act as support, so I expect the price to pull back to $18.31 and try to move higher from there. Feel free to share this stock report with others. Float Turnover Theory (The Basics) - When a company comes public it issues shares outstanding. The management always holds some percentage of these shares. What's left over and is sold to the public, is called the float or floating supply. Float Charts are all about tracking the floating supply in an attempt to see where The Smart Money is buying and selling. The gray rectangle on a Float Chart is known as a Float Turnover and changes from day to day much like a moving average. It shows the least amount of time it takes for the entire float to change hands once. The total amount of shares traded during the float turnover equals the floating supply. We simply add up the number of shares that traded over a given time frame until it equals a stock's publicly accessible float number. Imagine a stock's price that goes sideways for one float turnover right at the bottom of a long down trend and then breaks out to the upside. The idea here is that during the sideways move new ownership (The Smart Money) has possibly bought the float hoping that the price will move higher. Once a large percentage of the float is accumulated and held tight by The Smart Money, any new demand drives the price higher. The upper and lower channel lines on a float chart are created by plotting the upper and lower right hand corners of the float turnover box. Thus the float lines leave a historical trail of where the float box has been in the past. The upper float line acts as a potential point of resistance when it is declining. The lower float line acts as a potential point of support when it is rising.
Will USA Truck Move
Higher From Here? A float turnover breakout is not necessarily a buy signal. It is an early sign that the long term trend is ending and the stock may be ready to turn around and head higher. Whenever any stock makes a long term bottom, turns around and heads higher it always leaves a float turnover right at the bottom.
STUDY THE
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