Repeating Patterns In Stock Charts: $LOCO

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Is This A Treasure Map, Or Am I $LOCO?

 

By Paul Konikowski, CTS-D

Looking for the patterns in static, they start to make sense, the longer I’m at it

from “Lightness”, by Death Cab For Cutie

About an hour after El Pollo Loco made its initial public stock offering on July 25, 2015, I decided to day-trade the corresponding $LOCO stock ticker. If you have never traded stocks, the goal of a day trader is to take advantage of short-term trends and volatility.  I sold the stock position less than two hours after I entered, and felt rather proud of my trade, or at least lucky.

El Pollo Loco Initial Public Offering day

El Pollo Loco $LOCO three-minute candle chart on the day of their IPO, and my initial day trade in green

As I watched the three-minute candle chart play out the rest of the day (each candle representing three minutes of trades), I noticed that the price action was acting like it had earlier that morning, in terms of short-term chart patterns and resistance levels.

EL Pollo Loco 5 minute IPO chart with resistance lines

Three minute candle chart of EL Pollo Loco stock price on its IPO day chart with my perceived resistance lines

I looked more closely, and noticed that the volume pattern (to the left of the vertical line in the screen shot below) was also repeating on a larger scale the rest of the day (to the right of the vertical line in the screen shot below)

$LOCO IPO chart repeats itself on a larger scale, including the volume pattern

Notice how the chart repeats itself on a larger scale after the vertical line, including the volume pattern

Its worth mentioning that The El Pollo Loco IPO happened on a Friday morning, which essentially gave me an entire weekend to over think the repeating pattern. The resulting hypothesis was that the pattern might repeat again, a third iteration, only on a slightly larger scale. The first pattern lasted about 2 hours, the next about 4.5, so I estimated the third pattern iteration would naturally expand to fill Monday’s trading session of 7.5 hours.

My El Pollo Loco Trade Plan for Monday July 28, based on the Friday July 25 IPO chart, worked like charm

My El Pollo Loco Trade Plan for Monday July 28 was right in terms of candles and volume

I noticed that $LOCO was up in the pre-market on Monday July 28, and re-entered. If my theory was correct, it would start with a pop, and end with a surge of buying; it did.

Compare this 5 minute stock chart from Monday July 28 to the 3 minute chart from Friday July 25

I used the 3 minute chart from Friday July 25 to anticipate the 5 minute candles on Monday July 28.


Okay, here is where it gets crazy

After my best two days of stock trading, I decided that a. I would definitely need to blog about this pattern sometime and b. I should frame the “LOCO TRADE PLAN”. I wanted to have a positive reminder to “plan the trade, trade the plan”, and thought it would be handy in case some day, the El Pollo Loco pattern might happen to repeat itself. I honestly, never, ever, expected it to repeat more than twice. How could it repeat again? We are talking about a chicken restaurant and the stock market, not a fern in the woods!

But then every time I think its gone, it comes right back, hitting me between the eyes, the price hitting Fibonacci extension and retracement levels, repeatedly. So far, I have counted at least two more iterations of the pattern best depicted in the July 28 five min candles. The patterns have ranged from 2 days to a week in duration. Even now, I think I see the same pattern developing on the daily candles.

Daily candle chart of El Pollo Loco $LOCO stock price as of August 19, 2014

Daily candle chart of El Pollo Loco $LOCO stock price as of August 19, 2014

Am I ONTO something, or am I ON something? Is this treasure map the key to trading $LOCO, or is it just Apophenia, where I am seeing patterns or connections in random or meaningless data? You decide for yourself, I am heading out to grab some more chicken. :)

Please note that the blog author Paul Konikowski currently owns stock in El Pollo Loco, and plans to trade it again. You need to do your own research and form your own opinion. Paul is not an analyst and is in no way making any price projections.

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Marketing With Twitter Hashtags

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When #Sharknado2 Attacks: How To Use Trending Hashtags On Twitter

By Paul Konikowski, CTS-D

Last Wednesday, July 30, 2014, Sharknado 2: The Second One made its small-screen debut on the SyFy Channel. Don’t worry, no spoilers herel I have not seen the movie, but I have watched the hashtag #Sharknado2 as it trended up and down on Twitter (thank you hashtags.org)

#sharknado2 30 July 2014

I thought it was interesting how the #sharknado2 hashtag actually created a shark fin shape that swam through time; here is what it looked like the next afternoon…

#sharknado2 31 July 2014

Tonight, when I sat down to write this blog, I decided to check the hashtags.org statistics again, and sure, enough, another #sharknado2 trend had appeared, telling me that SyFy was airing the movie once again. #SHARKNADO ATTACK!! Notice, it looks like there are less sharks this time around this time; 20,000 tweets per hour versus 100,000 last week:

#Sharknado2 3 August 2014

This series of short-term #sharknado2 attacks makes perfect sense, because Twitter users (aka Tweeters) LOVED the original Sharknado movie, and tweeted loudly that they wanted another. So each time that SyFy Channel airs the movie, you can expect a similar spike, and fall. Savvy marketers and bloggers can capitalize on these short-term Twitter trends by writing posts that combine the trending hashtag with other keywords and links.  Even with a small social marketing budget of less than $100, you can target a specific audience over a few hours or days

Twitter Ads With Hashtags

This ensures that your post is not lost in the Sea Of Tweets, generating more traffic to your website:

Twitter Ads ROI

Based on the success of #Sharknado and #Sharknado2, I fully expect we will see #sharknado3 and #sharknado4. Hopefully, you will be well prepared, when #sharkhappens.

I Propose An Infocomm Northwest

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Leaving Las Vegas: Why InfoComm Should Also Visit Seattle or San Francisco, Where AV Innovation Is More Than Just Stagecraft

By Paul Konikowski, CTS-D

I was honored to be a special guest this past Friday on AVweek, a weekly podcast produced by AVnation.tv that discusses current events of the audiovisual industry.  After the podcast, the other contributors and I started talking about how the annual CEDIA expo may smell a little different this year, as this September, CEDIA expo-goers would now have the liberty of trying some of Denver’s new, umm, legislation…

I started to think about all of the cities where I have attended conferences geared towards audio and video.  I have traveled to Philadelphia, PA for EduCause; Amsterdam,NL for ISE; Anaheim,CA for InfoComm and NAMM; Indianapolis,IN and Denver,CO for CEDIA; New York,NY and San Francisco,CA for AES; and Orlando,FL for Infocomm.  And, of course, Las Vegas,NV for both CES in January (when the weather is kind of nice), and the Infocomm in June (when I sometimes wonder if I died in my sleep, and then woke up within the inner circles of Dante’s Inferno.)

Whenever I get back from these conferences, and I am inevitably reminded of the advances in technology taking place where I live on the Bay Area.  One might even argue that the bulk of American technological innovation comes from Silicon Valley, San Francisco, and Seattle, and that the rest of the country is simply trying to keep up with the West Coast (with extra emphasis on the word argue, as I sure many hipsters in Brooklyn or Austin would be terribly offended by my statement. If you are one of the offended, then I suggest you go buy yourself a RumChata, and you will feel better.)

So why is the Infocomm Show held in Las Vegas, anyway?  I think the main reason is logistics.  Las Vegas is more centrally located than most of the other cities I mentioned.  The Las Vegas Convention Center is certainly large enough for the Infocomm Show, and there are plenty of hotels and restaurants for meetings.  AV manufacturers and integrators based in Southern California can simply drive their gear to Las Vegas.  Others from around the country can easily find flights to Vegas.

There is also the wow-factor and live performance aspect of Las Vegas that can not be matched in other cities.  Between the Cirque du Soleil shows and purpose-built concert halls, there are plenty of places for manufacturers to host after-hours events; not to mention all of the bright lights and video screens: all help to remind AV folks exactly how big of a deal AV can actually be, when there is adequate budget.

Still, I can’t help but wonder, why not host an Infocomm Show in San Francisco, Silicon Valley, or Seattle? Isn’t the Infocomm Show supposed to be a gathering of the vibes for the AV industry? If we are embracing the so-called AV/IT convergence (where audiovisual meets information technology, hangs out, and has a few beers), why isn’t this annual AV trade show hosted someplace where Information Technology people hang out?

Again, I know in the end it’s probably about logistics, and if that is the basis for choosing the location for InfoComm, well then I will never win this argument.  Hotels and flights to the San Francisco Bay or Seattle would certainly be much tougher for AV folks, especially those on the East Coast. But flights to Orlando are not easy for anyone on the West Coast, either. Food and drinks are much more pricey in the Bay Area, and the convention centers are just not as big as Vegas.  But that is exactly why we need to put logistics second, for at least one year, and put technology first.

If Infocomm was only about logistics, and keeping costs down, we might as well host the entire trade show online.  Each booth could have a five or ten minute video showing their new products, with live Q&A available for engineers like me who ask way too many questions. Virtual meetings could take place using Google Hangouts, and participants could simply scan a QRcode or “click here” for more information from a given manufacturer.  The classes and seminars that are normally offerred at Infocomm could be accomplished using on-demand webinars and online testing.  But we all know the Big Show is much more than just business meetings, educational seminars, and seeing new products.

Infocomm is about synergy.  It’s about the random person you meet on the monorail who happens to know so-and-so and suddenly the two of you are discussing a current design challenge or potential project.  The energy and excitement of meeting new people and gaining new skills, while seeing old friends and past co-workers is what makes the Infocomm Show so awesome, and that is precisely why it needs to happen as a live event each year.  Infocomm gets us out of our shells and the shear fact that you are not back in your office or on a job site doing an installation, means you can focus more on learning (I know, I know, easier said, than done).

It’s that same synergy that has convinced me that there needs to be an Infocomm Northwest.  Every time I go to a trade show, I notice that many of the attendees are locals who, if the show was located in another state or country, simply could not attend.  The same is true for employees of the information technology and internet-based companies in Silicon Valley: many of them do not have the time to travel to Las Vegas (despite their unlimited vacation), BUT if that same Infocomm show was located in the Bay Area, they might be able to attend for a day or two, without impacting their work load, or their Burning Man camp planning.  As Kevin Costner learned in Field of Dreams, “if you build it, they will come”.

Let’s take a company like DropBox, for instance.  Many AV installation firms use Dropbox as a way to share files, yet DropBox probably has no idea that Infocomm even exists!  This example can be expanded to almost all IT, software, and internet based technology that is born in the Bay Area or Seattle.  They don’t know there are audiovisual consultants, because we are nothing in comparison to the larger information technology business model they are used to dealing with. We need to change that, and get on their radar, before the entire AV industry goe the way of the wireless microphones based in the VHF and UHF channels, now banned from use due to changes in the IT sectors.

So I say, “Hey Infocomm, let’s leave Las Vegas, maybe not for good, but for at least one year.”  Let’s host an Infocomm Northwest here in the Bay Area or in Seattle, where technology is being born, not chased.  Wouldn’t you rather travel to Northern California or Seattle in June?  Let me know your thoughts in the comment section below, via Twitter @pkaudiovisual or send me an email to pkav.info at gmail.com.

Yes, I use gmail; don’t you?