Supply and demand in a nutshell by Alfonso Moreno

There is no magic formula or an obscure recipe that you can cook and turn you into a profitable trader. When going over your watchlist, you may have realized specific patterns that repeat themselves over and over.

Maybe you haven’t realized yet but being proficient at reading price action and the numerous candlestick patterns can tell you a lot about the future moves of the market. You may have started to follow me and my analyses, or maybe you’ve been reading them for quite a long time. One thing that is common in all my analysis is the strength of the impulse, and the patience one needs to have to wait for the price to pull back to those impulses.

Some many so-called magic indicators and oscillators will tell you when to buy or when to sell, but I’m pretty sure you know they will not work. Otherwise, you’d probably not be wasting your time reading my weekly newsletters.

Staying away from your computer as much as you want is actually a variable you should have in your trading plan because if you keep on watching the charts expecting to move the price with the power of your mind, you might be disappointed.

You can read the full article and forex and stock analysis in this link

Many cryptocurrency intraday traders may have realized that BitCoin has been moving erratically for the last weeks. It has nothing to do with ghosts trading in the background or cryptocurrency miners, it’s just how cryptocurrencies move and how the financial market behaves after a strong movement. Why is it that BitCoin cryptocurrency is dropping so strongly?

If you were looking at BitCoin cryptocurrency wearing supply and demand glasses, you would have noticed there was a huge impulse that becomes an imbalance around $9,350. See how prior BitCoin supply and demand analysis and forecast played out nicely, it was called way before it happened. We discussed the old imbalance in a previous cryptocurrency analysis.


How to trade Bitcoin cryptocurrency

Is there a buy opportunity for Intel Corp. (NASDAQ: INTC) stock now? Take a look at the monthly timeframe attached below. There is a clear bullish bias on Intel Corp. (NASDAQ: INTC) stock with the monthly demand level around $46 per share. There has been a strong reaction to that price level and imbalance every time Intel Corp. (NASDAQ: INTC) stock has reached that imbalance.

Supply and demand trading has nothing to do with support and resistance; they are two different concepts and stock trading strategies. You may think it’s the same thing they have nothing to do with each other. You may use intraday stock strategies and short-term stock strategies to trade Intel stock if it keeps on reacting as expected. You can also use stock options strategies to trade Intel stock. Since this stock has a bullish bias, you should think of bullish options strategies.



Supply and demand stocks trading strategy

Salesforce.com, inc. is an American company that develops enterprise cloud computing solutions with a focus on customer relationship management worldwide. Salesforce.com offers Sales Cloud to store data, monitor leads and progress, forecast opportunities, and gain insights through analytics and relationship intelligence, as well as deliver quotes, contracts, and invoices. Salesforce provides cloud-based SaaS (software being used as a service) solutions for enterprise customers. Salesforce’s flagship CRM (customer relationship management) platform helps companies manage customer relationships over the cloud. It’s been the world’s largest CRM software provider over the past seven years, I used it a few years ago when working on a personal web project to contact with prospects and leads. It was a really powerful software. Unfortunately, I no longer need to use a CRM software solution.

Salesforce.com stock (NYSE:CRM) has broken all-time highs. There is a lot of bullish momentum and new strong impulses being created on all timeframes. The stock has broken all-time high again and created a strong imbalance around $202 per share. Stock investors will probably be hoping for strength from CRM as it approaches its next earnings release. The company is expected to report EPS of $0.74, down 1.33% from the prior-year quarter. As supply and demand traders we do not care about stock fundamental analysis or earnings reports, only about the strength of these imbalances and the trend.

Supply and demand stocks trading strategy

Chinese e-commerce Alibaba may not qualify as an archetypal blue-chip stock, but at half a trillion dollars and growing, it’s earned significant global respect and long-term staying power. Alibaba is one of the largest company in the world’s hottest major market – even after 2020’s pandemic – Alibaba arguably enjoys better long-term growth prospects than Amazon.com and yet trades at a much smaller price.

There are new strong weekly imbalances created on Alibaba stock as the price is breaking all-time highs over and over. The stock is very bullish but there has been no pullback to the last Alibaba stock imbalances.

You can review the las Alibaba Stock today analysis visiting this link.

Alibaba BABA price chart
Well, there was a very strong weekly demand imbalance located around $253. There is a clear bullish bias on this stock but by the time price pulls back to these imbalances they might have been invalidated. Top-down stock analysis is needed to make the right trading decision.


Alibaba stock forecast

The Australian dollar currency has been pretty strong against the Canadian Dollar since the monthly timeframe created the bullish pin candle last March 2020. Both of these Forex currencies are regarded as commodity currencies and are considered to be a relatively stable currency pair. The CAD fortunes are closely related to the U.S. because it is their largest trading partner and neighbour. The AUD is more affected by its alignment with Australia and emerging Asian markets.

Most Forex traders will never load the monthly timeframe. To them, the monthly chart is like too long-term and sounds like science fiction to them. You will probably use an intraday forex strategy instead of a swing or medium-term strategy. That does not mean that the bigger timeframes cannot provide you with price action and price levels that can help at planning shorter-term trades on Forex using smaller timeframe trading strategies.

One thing is true, we should care about ascending channels or descending channels. We should care about fundamental analysis of neither the Canadian Dollar nor the Australian dollar. We only need to be able to read price action correctly and learn where the pools of supply and demand imbalances are located.

See full AUD TO CAD forex analysis

The outcome of the US presidential election 2020 is on a knife-edge, with Donald Trump and his rival Joe Biden neck and neck in key swing states. As a Forex or Stock traders, you will probably be scared by the high volatility of the markets during the elections.

As a supply and demand trader, you should not worry about the US Elections 2020 results. It doesn’t really matter whether Trump or Biden wins because the markets and the thousands of investors are already positioned. A long-term bullish or bearish stock or Forex cross pair will not change because Trump wins or loses. It’s true that price action might get a bit wicky with pin candles as the investors react to news and forecasts. It’s also true that you will see a lot of noise if you are looking at the smaller timeframes and ignore the long-term timeframes and bias for the stock and forex markets.

To be elected as the US president, a candidate must win at least 270 votes in what is called the electoral college. Each US state gets a certain number of votes partly based on its population and there are a total of 538 up for grabs. But you don’t necessarily need to know all these details about the elections. As a supply and demand stock and forex trader you just need to know where the imbalances are located, and what is the bias for a particular asset.

As explained in previous analysis and posts, I said the same during the COVID-19 pandemic early in 2020. Most stocks sold-off very rapidly, the world was going to end; the stock market was shattered. No, it was not. Huge imbalances took control and now both Nasdaq and S&P500 indexes have already broken pre COVID-19 all-time high prices. The virus did nothing but provide with the pullback to lower prices to buy very cheaply.



Supply and demand stocks trading strategy

Coca Cola (NYSE: KO) has always been a slow mover but it’s an American stock considered to be very safe because it hardly gives us any surprises. Using our supply and demand strategy we can learn what Coca Cola stock price could be in the near future.

There is a strong weekly demand level for Coca Cola stock that has gained control around $48 per share. We are expecting Coca Cola stock price to rally much higher. There is a lot of margin for profit. We should not care about Coca Cola stock earnings in the near future because a strong demand imbalance has gained control.


Watch Coca Cola stock price video analysis

eBay stock price forecast 2020
eBay is dropping as expected after a very strong bullish move. eBay stock forecast for 2020 is bullish but we are expecting a bearish correction down to the $34 per share. Will it drop to that strong demand imbalance? I don’t know but that’s what eBay stock price is expected to do in the forthcoming weeks.

Supply and demand stocks trading strategy

As explained in a previous analysis, we expected Boeing stock price to rally much higher. That’s exactly what this American stock has done regardless of the COVID-19 pandemic, together and problems delivering new aircraft to clients. Needless to say, problems in the airline sector for lack of travellers due to the lockdown. Read Boeing stock forecast below.

The COVID-19 pandemic has affected Boeing Stock price this year 2020quite a bit because the whole world has been locked down and the skies have been almost empty for a few months. But should it be a problem? No, it should not. As supply and demand traders, we must not focus on fundamentals analysis or catastrophes, we must use the logic behind price, why it moves and when it’s too cheap or too expensive.

Maybe Boeing stock may seem expensive to buy if you have a smaller trading account. That shouldn’t be a problem with many stock brokers now since they allow the purchase of a single share, not multiples of 100 shares. If you were to buy one single share of Boeing stock today, it would cost you $202. That’s not a lot of money. You can triple that amount and much more. You are no longer forced to buy 100 shares, that would be like a $20,200 investment. You can buy maybe 10 shares of Boeing stock for about $1,000.


Supply and demand stocks trading strategy

I am sure you’ve probably heard about price action trading. It’s not the name of an American action movie You will read price action on every financial web site and media when they refer to the movement of any stock of Forex cross pair. Price action is the movement of the underlying stock price plotted over time. It is said to form the basis for all technical analysis of any stock, commodity, futures or any other asset.

Many traders like me will rely exclusively on stock price action and supply and demand imbalances to make trading decisions. Candlestick formations and trend analysis is a very powerful weapon you must have in your stock trading arsenal. It can help you a lot at making trading decisions.

Price action trading requires patience, moreover if you are a supply and demand trader like me. We will see strong moves in a given direction and then once the movement has been made, I will have to wait for the pullback. That requires time, even more so when using timeframes like the weekly.

Trading price action requires a lot of practice. The underlying candlestick formations can tell us a lot about the market players involved in any move. You can see such an example in the stock price action analysis shared below for American Electric Power (NASDAQ: AEP) stock. This American stock is a major investor-owned electric utility in the United States of America, delivering electricity to more than five million customers in eleven American states.

Attached Image (click to enlarge)

Price action trading is almost everything

Berkshire Hathaway stock has been moving to higher grounds as expected and mentioned in my last stock technical analysis update. As expected the strong demand imbalance created at $175 per share has played out very nicely. Berkshire Hathaway stock price has been moving much higher managing to break all-time high again. Warren Buffet and most of his clients must be very happy people again.

As explained in a previous forecast for Berkshire Hathaway, we expected the stock to rally strongly from $176 per share and so it did. The all-time high has been broken and created another strong imbalance around $209 per share. Will Berkshire Hathaway stock price drop down there? We will see. Given the bullish strength of all US indexes, It might continue to rally much higher creating new imbalances.



Berkshire Hathaway stock price

Nikkei Index futures are moving higher breaking price levels from September 2018. As expected and mentioned in previous Nikkei 225 index analysis, a new strong bullish impulse has been created around 23,572 price level. The strength of that movement has turned that bullish impulse into a strong demand imbalance for the Japanese index.

Nikkei 225 Index forecast
Find below an updated analysis for Nikkei 225 index. The timeframe attached corresponds to the weekly timeframe. That means that every candlestick represents a week of time. For many of you intraday and shorter stock traders, that will be like a lot of time. Unfortunately, time flies and a few weeks of time can pass in the blink of an eye.

There is definitely a bullish bias on the Japanese Nikkei 225 index for the year 2020 and 2021. A lot of things have to happen for the index to reverse and give us a bearish bias. As supply and demand traders, we do not need to take into consideration any type of fundamental analysis for the Japanese index, price action and the strength of the imbalances is what matters the most.



Nikkei index futures

To many investors’ surprise, Intel stock has been beaten up badly in the past months. However, not too many traders will know why Intel stock cannot drop below the $42 price level. Many short-term and intraday day traders will think of potential short scenarios now that the momentum has “turned” against the company.

The momentum has turned against Intel stock? Well, if you think the momentum has turned against is because you are probably looking the smaller timeframes and you are only seen noise and chaos without any apparent direction. Directional trading on stocks is critical. If price action analysis and supply and demand are added as tools in your trading arsenal, you will see things in the stock market that have always been there but you were unaware of.

Intel stock price today
Although everything looks good for the company, as a dividend growth stock, it wasn’t appealing because of its combination of low dividend yield and relatively low dividend growth rate. That should be taken into account only if you are interested in buying shares of stock that provide a high dividend yield. Intel stock is one of those stocks to own because we like it or not, their processors are in most desktop PCs and Apple Mac.

What is a good price for Intel INTC? The imbalance created back in 2018 has been holding several pullbacks and it seems that Intel stock is about to rally again from that same price level and imbalance.


Intel stock price today

Shares of Hewlett Packard Enterprise stock dropped strongly by more than 40% this year amid weaker growth pressured by disruptions from the COVID-19 pandemic. However, most stock traders will be unaware of bigger timeframe imbalances and why all of the sudden Hewlett Packard stock price is rallying strongly again.

Take a look at the weekly timeframe analysis for Hewlett Packard stock. A strong weekly demand has gained control around $7.94 per share, we expect the stock to rally much higher. There is room to double and triple the stock price in a few months. No shorts are possible.

For those stock traders that like to invest and own the underlying stock, a 5.3% stock dividend is way too juicy to ignore. Hewlett Packard is offering such a dividend, it’s something to bear in mind when making such stock trading decisions.

Hewlett Packard stock price
See below the weekly timeframe. You will see what I am expecting Hewlett Packard stock price to be in the next months.

Attached Image (click to enlarge)

Hewlett Packard stock forecast 2020

Is Bilibili Inc. stock China’s YouTube? Is it a stock to buy? The company provides online entertainment services for the young generations in the People’s Republic of China. BiliBili Inc. [NASDAQ: BILI) offers a platform that covers a range of genres and media formats, including videos, live broadcasting, and mobile games. The company has a strategic collaboration agreement with Tencent Holdings Limited for sharing and operating existing and additional anime and games on its platform in China.

YouTube and Netflix have been big beneficiaries of the rise of online video consumption and so has been BiliBili stock. Bilibili, often referred to as China’s closest answer to YouTube, has several growth drivers including e-commerce.

Online video consumption has been growing steadily worldwide and the story is not very different in China where most internet users watch streaming videos and movies, or downloaded video content very often.

While we always think of Douyin, the Chinese version of TikTok, when talking about China’s video-sharing platforms, Bilibili stock a rising star, and is often overlooked. The company is growing very fast as evidenced by its huge number of growing users, with more than 150 million users.

BiliBili stock forecast
BiliBili stock’s IPO was last March 2018. Since it went live, it has not stopped rallying and breaking all-time highs month after month. On its way up, stock it has created two strong imbalances. The two imbalances are located around $48 and $40 per share. I am sure many stock traders have purchased shares of this Chinese stock. The monthly timeframe is clearing trending up and we should only think of buying shares of BiliBili stock. I am watching hundreds of stocks trading in the Nasdaq exchange; I am just patiently waiting for the stock to pull back to one of the imbalances, expecting that when it does the trend will still be intact for BiliBili stock China.


BiliBili stock price

As explained in a previous Bank Nifty futures supply and demand forecast, Bank Nifty India managed to broke all-time high last December 2019 but covid-19 fear shuttered the progress the index had made in previous months creating one of the strongest bearish impulses in many years. Since that strong sell-off at the beginning of 2020, Bank Nifty has almost reached pre covid-19 price levels.

Nifty 50 has already broken all-time highs. We expect Bank Nifty to do the same in the next weeks. This scenario is affecting positively Bank Nifty stocks. It’s is moving higher as expected, following suit what Nifty 50 NSE index and what other world indexes have already accomplished, including Nasdaq and S&P500 American indexes.
There is nothing to the left on the weekly timeframe to stop Bank Nifty from rallying much higher. As supply and demand traders we must not sell after a very strong bearish impulse, it goes against the core concepts of supply and demand theories. As predicted in Bank Nifty futures analysis and forecast there was a lot of room for Bank Nifty futures index to reach the weekly supply around 30200 around #1. Swing traders and intraday traders would have many opportunities to trade all the way up to that price level. Bank Nifty futures is moving as expected.



Bank Nifty Futures Price Forecast 2021

Higher probability Nifty 50 futures trading December 2020
As supply and demand traders we must not sell after a very strong bearish impulse, it goes against the core concepts of supply and demand theories. As predicted in a previous Nifty 50 futures analysis and forecast together with the prediction for Bank Nifty futures analysis and forecast there is nothing that can prevent Nifty 50 index to keep on moving higher since there are no obstacles after breaking all-time highs.



Nifty 50 Futures Price Forecast 2021

Hannover Re is a German stock with a gross premium of around €22.6 billion, is a European and third-largest reinsurance group in the world. Its headquarters is in Hannover, Germany. The company was founded in 1966 under the name Aktiengesellschaft für Transport- und Rückversicherung. This stock is a great example of how to trade European stocks using supply and demand imbalances.

As supply and demand traders, we don’t need to pay attention to fundamental stock analysis in order to buy shares of stock. As you can see in the weekly timeframe analysis for Hannover Re. German stock, there is a very strong weekly demand level that just took control around 120 euros per share. It’s a great setup to buy shares of this German stock right now. I am long on this European stock. There is a lot of profit potential on this stock.

I could spend an hour talking about the history of the company, its profits or lack of them or even how it has performed during the COVID-19 pandemic. I won’t do it because I don’t need to bear that in mind in order to buy stock using my supply and demand stock trading strategy. This is the type of imbalance we want to trade and one of the many examples that are being shared as they happen in the European and American stock market.

We focus only on strong imbalances. Will Hannover Re German stock rally as expected? Nobody knows, but it’s a great imbalance and the bigger picture trend is bullish, so we can only make two decisions. Either we can buy now or we can pass on it. I did not pass on it and took the risk. No risk, no profit. Once you know where you can buy and sell, it shouldn’t be so difficult how to learn to trade stocks.



How to trade European stocks

GBPUSD analysis, The British pound has stayed supported by the passage of post-Brexit trade deal in the UK Parliament. This together with the prevalent bearish sentiment surrounding the US dollar and the Dollar Index, allowed the GBPUSD pair to create brand new demand imbalances and build on its bullish momentum eliminating weak supply levels. GBPUSD analysis is clearly bullish with new demand levels being created as it builds a bullish momentum.

Let’s say there is a double correlation between GBPUSD analysis and dollar weakness that is helping GBPUSD major cross pair to keep on rallying and respecting demand imbalances created on the daily timeframe like the one you can see in GBPUSD analysis below.


Supply and demand Forex trading strategy