Supply and demand in a nutshell by Alfonso Moreno

It’s been a rough year for cannabis stocks and even though Aurora Cannabis (NYSE: ACB) is one of the most notable companies in the Cannabis sector, it had its fair share of struggles in year 2019.

The stock has been dropping strongly for many months since April 2019. Following that yearlong downtrend, here are a few reasons to consider buying Aurora’s stock in 2020 based. Remember we only trade supply and demand imbalances, we are not interested in fundamentals for this particular cannabis stock.

We don’t care if the company could bring in a new CEO to negotiate a deal to bring consumer packaged goods to the company and bring greater financial discipline to the company. We could start adding fundamental analysis and why Aurora Cannabis hasn’t done very well last year.

Who cares about all that? What we should care is about the super strong monthly demand imbalance that price has reaches after months of continuous devaluation of the stock. As supply and demand traders we should only be interested in trading strong imbalances, price levels where the underlying asset is out of balance.
See Aurora Cannabis ACB stock monthly timeframe supply and demand analysis underneath. We can see a very strong monthly demand level around $2.15 per share. It’s a very strong impulse that provides us with a lot margin for price if price reacts to that imbalance as expected.

What we do care is the strong monthly demand imbalance price is trading at around $2.15. Not only that, this stock is very cheap right now, a 100 shares of this stock would cost about $200, it’s a bargain willing to buy and hold for many months until a decent profit has been obtained.

AUDUSD Australian Dollar versus US Dollar is trading now within a weak weekly demand level around 0,6688. The weekly timeframe has been dropping strongly for the last five weeks and it’s now trying to eliminate weekly demand level at #1 where the prior bullish move started.

The weekly demand imbalance is being attacked, even though price has been dropping for so long, we want that demand level to be eliminated before we think of shorts now. Shorts were possible and available on the way down, now we need current AUDUSD forex cross pair obstacle to be eliminated before taking any decisions.



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Exxon Mobil Corporation #XOM Exxon explores for and produces crude oil and natural gas. As of December 31, 2018, it had approximately 24,696 net operated wells with proved reserves of 24.3 billion oil-equivalent barrels.

With Light Crude Oil and Brent dropping like a rock, many oil related stocks like Exxon Mobil Corporation have been showing a bearish directional bias with long term shorts and new monthly supply imbalances being created and respected for months as can be seen in the monthly timeframe supply and demand technical analysis below.

We read about “buy” recommendations not long ago, that was crazy! Those recommendations were probably focused on the price of oil as the reason the share price is down, with an assumption that it will go back up. Cray stuff if you lean purely on fundamentals and earnings, everything is pointing down and downtrending, why buy this stock? Think about it! It is all about the XOM price (cheap in the eyes of those urging “buy”) and an assumption that the price of oil is almost the only relevant determinant of future success of XOM.

Two major negatives for Exxon Mobil Corporation currently are competition from renewables and new focus on the climate emergency. Investors might think hard before they assume that the new 10-year low for Exxon Mobile XOM share price is where the slide stops.

Using a supply and demand strategy and applying the core concepts on Exxon Mobile yields another outcome. Monthly is downtrending, new supply level being created on the monthly timeframe around $68 per share as a continuation of a monthly downtrend and created also as a continuation of prior monthly supply imbalance from $80 per share.

Attached Image (click to enlarge)

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Nifty 50 has broken all time highs again as expected and mentioned in previous supply and demand video analysis. When trading our supply and demand strategy, you don’t need to pay attention to any fundamentals or earnings announcements, we base our entries on new imbalances.

It’s very important to trade these strong impulses in the context of a bigger picture trend and avoid trading counter trend scenarios. How can you buy Nifty 50 futures index or Nifty 50 related stocks in an uptrend?

All time highs around 12,100 have been broken again and created a brand new monthly demand level around. Long term long bias on Nifty 50, will the retracement and bearish correction happen this time as it happened last time in previous month demand imbalance? We don’t know but that’s the imbalance we are interested in for a long term position on Nifty 50.



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Let’s have a look at USDSGD forex cross pair using the supply and demand glasses as technical analysis. This forex cross pair has created a very strong impulse on the weekly timeframe around 1.3497 price area that ended up becoming a strong demand imbalance where longs will be possible again. See weekly timeframe screenshot below.

Using our supply and demand glasses it should be pretty clear that the underlying asset, USDSGD cross pair is now very expensive to buy, we do not, we should not buy after a strong rally, it goes against the core principles of supply and demand.

Since the bigger picture trend is bullish, we should be interested only in buying USDSGD forex cross pair, but not it’s not possible. You can use this supply and demand technical analysis to plan your trades in smaller timeframes using other strategies, or even taken shorts of the way down. USDSGD is now within weekly supply imbalance around 1.3870, no longs allowed.

Attached Image (click to enlarge)

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New Zealand Kiwi dollar is on the move again after a few weeks of bearish moves on the way down to…? A strong weekly demand imbalance located around 69.96. If you are looking at the smaller timeframes, trading intraday or scalping NZDJPY Forex cross pair you have probably loss in your short positions.

Why? Because you are not aware of the strength of the demand imbalance that has now taken control of NZDJPY Forex cross pair. See screenshot below showing the weekly timeframe for New Zealand Dollar versus Japanese Yen, I believe it’s self explanatory.



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When trading supply and demand imbalances we don’t really need any indicator or add-on tools to tell us how and when to place a trade. Let’s take a look at Walt Disney Company stock #DIS using a supply and demand stock trading strategy.

We were waiting for Walt Disney #DIS to retrace to strong demand around $132 per share as explained in previous Walt Disney supply and demand analysis here, but price has fallen short of doing exactly what we expected.

See Walt Disney Stock monthly timeframe underneath, price almost reached monthly demand imbalance around $133.68 and kept on rallying.



Walt Disney stock analysis forecast

What is EURUSD Forex cross pair forecast based on supply and demand technical analysis? Well, as discussed in past technical analyses in the past, we have a clear long term short bias on EURUSD Forex cross pair creating and respecting bigger timeframe supply levels and imbalances and eliminating obstacles in the form of demand imbalances.

There is a brand new weekly supply created last week around 1.1025 price area where we would be interested in selling. It’s also the strongest bearish impulse in months following suit the bullish strength of Dollar Index #DXY. See weekly timeframe supply and demand technical analysis below.



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GOLD XAUUSD and Gold futures have been rallying for weeks and months providing buy opportunities. The attached GOLD chart below represents the weekly timeframe, that is, a longer term analysis with each candlestick representing a week worth of time.

There is a very strong weekly imbalance located at #1 much lower around 1.478 but it seems that price is not retracing to that strong imbalance and will be rallying further given the type price action we can see on Gold weekly timeframe. We are expecting W highs at #2 around 1.612 to be eliminated, we can see a strong impulse being created around 1.583.

There is a clear bullish bias on the weekly timeframe, the odds are with longs and not shorts.
You can use this longer term analysis of Gold to buy in smaller timeframes using other strategies, you can use indicators and oscillators if you want, we don’t need them to place a trade using supply and demand imbalances.



Gold futures technical analysis and forecast

CADJPY reached monthly demand zone. I buy long term.

Hyatt Hotels Corporation is a hospitality company that develops, owns, operates, manages, franchises, licenses, or provides services to hotels, resorts, residential, and other properties.

We also trade stocks Stocks at Set and Forget trading community, and Hyatt Hotels is one of countless examples where the imbalances are called way before price retraces to it. Talking about a great trade after the trade is in good profit can be done by everyone.

Let’s have a look at Hyatt Hotels weekly timeframe posted in the trading community last 27th January 2020. As explained in that analysis, we were looking to go long at weekly demand level located around $81.63 per share.



A week later, price reaches that imbalance and you can see what happened four weeks later. Hyatt Hotels stock price is now trading at $92.86, it almost reached $95 per share, that’s a pretty strong reaction, isn’t it?



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European major currencies such as the Euro and British Pound outperformed against the US Dollar on Friday. I happened to read that the US dollar has been on a climb amid the outbreak of the coronavirus which is threatening global growth. That the United States was thrown into the spotlight after a gauge of business activity unexpectedly contracted according to preliminary estimates for February. Wuhan virus woes were brought up.

Well, I had to re-read a couple of times what I wrote because I cannot make sense out of it. What does the worldwide known coronavirus soon to be declared a pandemia have to do with the EURUSD and the fact that there has been and still is in a clear bearish bias? Unluckily human beings have an urge to read about fatalities and bad news, we love that as a race. We feel “safer and more comfortable” by knowing that “someone else” is in bigger trouble than us.

This does not apply to Forex currency pair or the financial markets. It’s true that bad news or a very bad earnings release could shake the markets quite a bit, but if you look at the bigger picture you won’t even see what happened.

Take a look at the attached EURUSD weekly timeframe. The EURO has been in a clear downtrend for months, the US dollar has been pretty strong and so is Dollar Index #DXY. A single day or a few days of bearish candlesticks on the US dollar means nothing if you look at the bigger picture.

EURUSD has created a very strong weekly supply level around 1.1025 price area, we are patiently waiting for a retracement in order to go short.

Attached Image (click to enlarge)

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The US Dollar Index is an index of the value of the United States dollar relative to a basket of foreign currencies, often referred to as a basket of U.S. trade partners’ currencies. This index is highly correlated with US dollar Forex cross pairs since it’s the reference for the US dollar strength versus strongest world currencies.

When we look at the US Dollar Index DXY weekly timeframe, we can see a very strong weekly demand imbalance created around $97.88. That weekly imbalance at #1 is the strongest impulse for months. See DXY screenshot below.

As supply and demand traders trading a supply and demand trading strategy, we should be looking to trade this kind of imbalances. This is a long term supply and demand trading analysis based on the weekly timeframe, you can use this analysis to trade intraday or even scalp the Dollar Index DXY. I am just pointing out the importance and strength of the weekly demand imbalance around $97 where long term longs will be possible again.

Will price retrace at that weekly demand level? We don’t know, but if it does and the scenario is still valid, we should be looking to go long. Will that imbalance play out nicely? We don’t know, the odds are high but imbalances are also broken. Make sure you know what to do at those imbalances, trade your trading plan and focus on high probability imbalances in a clear trend. If you do that, you will be right more often than not, and that’s what we need. Being right more often than not with a nice return on every winning trade will have you on the right side of the equity curve all the time. Just be patient and focus on the clear setups.



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Uber Technologies, Inc., commonly known as Uber, is an American multinational ride-hailing company offering services that include peer-to-peer ride sharing, ride service hailing, food delivery, and a micro-mobility system with electric bikes and scooters.

What does UBER Technologies #UBER has to do with supply and demand? Well, everything has to do with it, everything! When something is cheap to buy, we are happy to buy it even if we don’t need that thing we are buying. On the contrary, if something we already had and belonged to us is very expensive, we tend to sell it and get some nice profit out of it. Wouldn’t you sell a $200k house for $400k? I would!

The stock market is not an exception, UBER Technologies either. See #UBER monthly timeframe supply and demand trading analysis in the screenshot below.



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The SPDR S&P 500 trust is an exchange-traded fund which trades on the NYSE Arca under the symbol (NYSE Arca: SPY). SPDR is an acronym for the Standard & Poor’s Depositary Receipts, the former name of the ETF. It is designed to track the S&P 500 stock market index.

Trading SPY ETF is like trading S&P 500 #ES futures and e-minim futures, their moves are very similar. When we look SPY ETF at the monthly timeframe we can see that price has finally reached the monthly demand imbalance at #1 we were waiting for and has started to react to it. Take a look at SP500 ETF #SPY analysis below.

If you are not paying attention to the bigger timeframes you will be missing structure and location of these imbalances. These strong imbalances can provide us with many trading opportunities, assuming that you are even aware of these bigger timeframe imbalances. The major US indexes have correctly strongly last February 2020, but that does not mean that we should be thinking of going shorts right now. You are probably looking at smaller timeframes like M15, the hourly timeframe, even H4 and Daily timeframes. Everything is red! Does that mean you can go short? Well, look at #SPY strong monthly imbalance and try to come up with the answer yourself.



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British Pound versus Norwegian Krone Forex cross pair (GBPNOK) has been rallying for weeks and months creating new imbalances on the way up. In the attached screenshot we can see GBPNOK weekly timeframe creating new strong imbalances but unfortunately price has not retraced to any of them.

GBP NOK technical analysis forecast
We can see the super strong weekly bullish pin candle that tried to pull liquidity from the pool of buy orders accumulated at weekly demand right underneath around 11.61. The buying pressure was so strong that GBPNOK could not reach the weekly demand imbalance as we would have wanted and expected.
Trading is a waiting game and many times price will not retrace to the price levels you are looking to trade, that’s trading, we just can’t move the markets with the power of our minds!



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The British Pound versus the American Dollar (GBPUSD) has been doing nothing for a few weeks and suddenly we’ve seen a strong burst that ended up creating a new demand imbalance on the daily timeframe around 1.28 price level.

The British Pound is getting very strong across the board, except GBPJPY Forex cross pair, most British pound cross pairs are getting very strong, GBPUSD major cross pair included. In the attached screenshot we can see GBPUSD daily timeframe creating a new strong imbalance but no retracement yet.

The new impulse on GBPUSD forex cross pair is way stronger than any bearish impulse around, the strongest one in weeks. Remember that a multiple timeframe analysis needs to be done in order to make a trading decision, one timeframe alone will not give you the context we need to place a trade, you would be lacking a lot of information.

You can use supply and demand technical analysis for GBPUSD daily timeframe to plan your trades in smaller timeframes using other Forex trading strategies or even indicators if you want. However, we don’t need any indicators to plan a trade using a supply and demand strategy but if you are using one and it works for you, it would be wise that you stick to it.

Attached Image (click to enlarge)

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Pinterest #PINS is a fast-growing company with favorable demographics, the stock has dropped in price while outperforming expectations.

Pinterest (PINS) debuted on the public markets less than a year ago at a price of $23.75. Since that time, Pinterest has dropped in price by a great percentage and do not thing for a moment that the coronavirus is to blame

The interesting part is that Pinterest has actually been profitable and has beaten earnings estimates in the last quarters. So why is it that Pinterest is dropping strongly, why? Because fundamentals are not that important when trading a supply and demand strategy.

I’ve happened to read that some analysts are claiming that Pinterest #PINS is a buy for anyone with at least a two-year time horizon. Well, it may be that Pinterest stock will be revalued in two years time, but why buying Pinterest now and lock in part of your capital in a stock that is dropping like a rock reacting to super strong weekly supply zones?

It makes no sense how some analysts and web sites are recommending buying Pinterest stock to hold it for two years when the stock is in a clear downtrend.

Take a look at Pinterest #PINS supply and demand weekly timeframe analysis. There is a strong weekly supply around $25 per share, these supply zones act like magnets to price, a price level where there are a lot of interest by professional investors.



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It never ceases to amaze me how powerful bigger timeframe imbalances are and how price can react to them no matter how old these imbalances are. There is a clear example of a very strong supply imbalance on the British Pound versus New Zealand Dollar (GBPNZD) Forex cross pair.

There is a very strong monthly supply imbalance created around 2.09 price level last May 2016. It took 44 months for price to retrace to it, that’s quite a lot of time. This is the type of imbalance you don’t want to trade against. These imbalances are not support and resistance, supply and demand imbalances have nothing to do with support and resistance even though some times imbalances contain classic support and resistance prive levels used by so many traders.

Take a look at GBPNZD Forex cross pair monthly timeframe supply and demand technical analysis below. If you are trading intraday or even scalping Forex cross pairs, you will be losing all of your trades since you won’t be aware of the strength of the imbalance that took control.



The Power of supply and demand imbalances

Have you been wondering when to buy BitCoin in 2020? If you are trading crypto currencies using a crypto currency trading strategy, you may have been surprised that your recent sell orders may have been a loss.

Many intraday traders may have woken up this morning to see that the stop loss in their sell orders have been triggered and they are out in a loss. Why is it that BitCoin crypto currency is rallying so strongly and triggering sell order stop losses?

If you were looking at BitCoin crypto currency wearing supply and demand glasses, you would have noticed there was a huge impulse that become an imbalance around $4.096. We discussed this new imbalance in a previous BitCoin technical analysis last November 2019, go and check that analysis together with the YouTube video included in it.

You can see an updated BitCoin crypto currency supply and demand analysis done on the monthly timeframe right underneath. We can see how the last monthly demand imbalances around $4.734 at #2 played out nicely. Everyone was thinking that BitCoin was dropping further and look at what happened. A similar scenario is happening right now with BitCoin crypto currency reacting to monthly demand imbalance at #1 around $4.096.

I got many personal messages telling me that my supply and demand analysis was not correct, that BitCoin would never reach $4.000 again, messages on my YouTube channel saying similar things. Well, look at the monthly timeframe below and reach your own conclusions.




Bitcoin supply and demand analysis