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Today we'll look at some reader requests:
1. The average daily trading volume needs to exceed 250,000 shares. If a stock trades too thinly, chart analysis doesn't help much, because there just are not that many traders involved. One big buy or sell order can move the stock in ways that chart analysis just cannot predict. So let's stay above 250,000 daily shares. 2. The stock really needs to be trading above $5. Sub-$5 stocks don't get the same treatment by institutions and portfolio managers. Also, many traders set their trading screens to ignore stocks below $5 just to cut down on their trading candidates. While I'm sure your favorite penny stock is the next undiscovered gem, I'm not in the business of breaking news stories. So once your gem is discovered, let me know, and I'll take a look at the chart. 3. Make sure you check my recent "3 Stocks" videos. I don't want to be too redundant, so if I've recently covered a stock in video format, I won't repeat it here. Hopefully, you've noticed that I alternate between daily and weekly bars in the charts. It's important to understand the underlying rationale for choosing one time frame over another. I differentiate between these time frames in pretty simple terms. The longer time frame -- the weekly bar chart -- is my "decision" time frame. I want to remain in phase with the trend, and I use the weekly bar chart to identify the trend. So I'll feature a weekly chart when I want to emphasize a certain aspect of the prevailing trend -- not a specific buy or sell point. This weekly chart is the time frame in which I make my decision: Do I want to buy or sell the stock? The daily chart is my "action" time frame. Once a decision is made on the basis of the weekly time frame, then we zoom in on the daily chart to choose that level at which action is taken. The daily time frame is my preferred frame of reference for actually implementing the decisions I've made on the weekly chart. In your own analysis, make sure you are using different time frames for different things; otherwise your actions will largely be a function of your emotions.
 This weekly chart of the SPDR Gold Shares shows an inverse head-and-shoulders pattern that continues to work. A breakout above the $100 neckline sets the stage for a move to $130. But remember: This is a weekly chart! As such, there is a lot of work to be done over a long period of time, so be patient. I'd wait for a test of the breakout at $100 before buying. While ultimately the GLD ETF moves higher, you're probably chasing if you are buying right now.
 Gold typically moves inversely to the dollar. As the dollar falls -- and boy is it falling -- gold, oil and the rest of the dollar-denominated commodities rise. Here, we see a double-top in the dollar in late 2008 and early 2009. Since the first-quarter high, the dollar has been trending lower and finally fell below the December low, thus completing the bearish "M" pattern shown above. So how far can the dollar fall? Well, there's no sign of a bottom yet, but I'll look for buyers around at around 72. Until then, I'm still short.
 Linear Technology remains in an uptrend. A series of higher highs reveals the increasing aggressiveness of the bulls. The problem is that each high is followed by a pullback to the same level -- namely, $26. That's indicative of a lack of committed demand. So what do we do now? I'd key off the 50-day moving average. If you focus on the 50-day moving average rather than the flat support line at $26, you can see that each pullback to this key moving average has brought out new buyers. As such, Linear Technology just may be closer to support than the chart shows. If you're bullish on this stock, consider buying some on a tag of the 50-day moving average, or certainly on a pullback to $26. Either way, you can define your risk and limit your downside.
 Between May and September, Nvidia doubled in price, but this stock looks to be in a bit of trouble now. I've highlighted the last three peaks, and you can see how this stock is forming a bearish head-and-shoulder pattern, with the last little rally to $15 forming a very small right shoulder. At the same time, the breakdown of the right shoulder has broken through the 50-day moving average. So I wouldn't be a buyer into this bearish pattern. Instead, I'd look to sell on any rally back to $14.
 This weekly chart of Plains Exploration & Production shows a stock that's poised to start another move higher, but the current trading range is $5, with support down at $25 and resistance at $30. So it's a bit risky to buy at resistance; you could sustain a $5 pullback before you'd know whether support would still hold. As such, I'd wait for some clarity. If the stock breaks out above $30, then consider buying with a stop just back in the channel. And if Plains Exploration & Production instead falls back into the channel, then your buy point would be down near $25, with a stop that clearly defines your risk. Be careful out there.
At the time of publication, Fitzpatrick was short the U.S. Dollar, though positions may change at any time. Dan Fitzpatrick is the publisher of StockMarketMentor.com, an advisory newsletter and educational forum dedicated to teaching effective risk management and trading methodologies to aspiring traders and investors. He is a former hedge fund manager and a member of the Market Technicians Association, and he now trades from his home in San Diego, Calif. While Fitzpatrick holds various securities licenses, he does not give recommendations to buy or sell stocks. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. He appreciates your feedback; click here to send him an email.  Brokerage Partners
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