Crown Castle Investment CCI is a stock for a potential short longer term, either shorting the stock itself or buying puts. The reason I like this stock is not hard to see, and perhaps the most interesting aspect is the volume described on the VPOC histogram on the y-axis of the chart. Notice that between the current price of $154.85 per share and through to $140, volume on the histogram is low, and so offers little in the way of potential support to any move lower and indeed in the past, we can see how quickly price has gone through this area both to the upside and down. As such we can expect the price to move through here rapidly once again since there is little in the way of old orders and in addition, there is a more subtle reason which is this. If the market did not consider this region important in the past why would it consider it important now?
Moving to the volume at the bottom of the chart, note the last two weeks which have both been accompanied by heavy selling and in agreement with the price action, with the current week looking to add to this sentiment. The first of the candles was selling into weakness with the deep wick to the upper body of the candle. Finally, note the strong resistance at $167 which capped efforts to rally and denoted with the red dashed line of the accumulation and distribution indicator which represents these regions according to their strength.
So in summary we have a stock that has been struggling to move higher since June and failing on each occasion and is now facing a huge chasm below as there is little to no meaningful price based support in evidence until we reach $130 per share where this is a minor cluster of two levels (blue and red), thereby offering a decent longer term return for the bears.
By Anna Coulling
Charts from NinjaTrader and indicators from Quantum Trading
Dear Anna,
Thank you always for your awesome VPA analysis. Love love your work!
Looking at today’s weekly chart (12/31/2020), it threw 2x vol. on the week of 12/14/2020 with little bit smaller candle than previous week.
The next week (12/21/2020), it made lower than average vol. with corresponding small wick. This week, it went up with half of vol. of last week.
From the last three weeks, I still see this as bear since the two weeks of green were made with smaller vol.
However, I don’t know how to interpret the 2x vol. on the week of 12/14/2020. Weekly chart also did made lower low.
Would you please share your thought with me? Thank you!
Hi Robin – many thanks for your comments and taking time to post here – you may be interested in joining my stock trading room using Tradestation where I will be showing VPA in action for stocks and covering questions such as this. You can find all the details on my site here – all best Anna