• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Stock Ichimoku Cloud: Looking to the Past to Find Future Trades
Stock

Ichimoku Cloud: Looking to the Past to Find Future Trades

by June 9, 2023
by June 9, 2023 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

Note: For the sake of brevity, this article will take a bullish and long-only approach. If you’re interested in going short, you can apply this information, but in reverse.

How can you efficiently use the Ichimoku Kinko Hyo (aka Ichimoku Cloud) indicator to find trading opportunities, especially when it has so many moving parts with bullish and bearish combinations?

As described in ChartSchool, the Ichimoku Cloud is a comprehensive indicator designed to produce clear signals. Comprehensive and clear, but also complex in many cases, and everyone who uses these indicators has their preferred way of combining the components.

One approach, which can help simplify the process and make it more efficient, would be to use the Chikou Span (aka Lagging Span) to assess current price action and future price targets. In short, you’d look 26 periods back to speculate what might happen between now and 26 periods into the future. Yes, that sounds strange, but if you give it a chance, it’s actually quite useful.

Not familiar with the Ichimoku Cloud and the different bullish and bearish indications derived from its five components? You can review it here.

One bullish signal is that of price moving above the cloud. StockCharts has a scan for this pattern event. Because it tends to produce lots of results, it’s best to modify it by raising the daily volume (included in the code below).

How to Do a Price-Moving-Above-Cloud Scan

To scan for this pattern event, do the following:

Go to Member Tools > Advanced Scan Workbench > New

Copy and paste the following code: 

[type = stock] 

AND [country is US] 

AND [[exchange is NYSE] OR [exchange is NASDAQ]] 

AND [market cap > 100] 

AND [Daily SMA(20,Daily Volume) > 500000] 

AND [Daily Above Ichimoku Cloud is true] 

AND [yesterday’s Daily Above Ichimoku Cloud is false] 

Click the Run Scan button.

The scan produced many results. One of the candidates was Allegheny Technologies (ATI).

CHART 1: ALLEGHENY TECHNOLOGIES BREAKS ABOVE ICHIMOKU CLOUD. Could this stock be a candidate for a future trade?Chart source: StockCharts.com (click chart for live version). For illustrative purposes only.

Price has moved above the cloud—what the scan picked up. When price moves above the cloud, it’s a signal to monitor for future opportunities. If you go back to December 2022, the blue arrow shows a time when price broke above the cloud.

Here’s what you need to look out for. The Lagging Span (the green line) plays an important role. When it’s above the conversion line, base line, price, and the cloud (all Ichimoku lingo), it indicates the likelihood of a stronger degree of buying pressure supporting the trend. The Lagging Span will be 26 periods behind the current price. 

So, in the chart above, the buy signal came later when price broke above the conversion line (second blue oval). If you had entered a trade at that time, you would have made a good return, as long as you exited the trade at around the time when the conversion line crossed below the base line and the Lagging Span turned lower.  

Looking at the current price on the chart of ATI, the Lagging Span is moving higher above the cloud, but the cloud has turned red. A lot will depend on how much upward momentum the price has, as it’s within the now-bearish cloud.

Let’s take a look at another scan result, the stock of a company you may be familiar with—Blackstone Group (BX).

CHART 2: BLACKSTONE GROUP’S SIX-MONTH SYMMETRICAL TRIANGLE. This is a stock to patiently watch.Chart source: StockCharts.com (click chart for live version). For illustrative purposes only.

Notice the extremely lengthy symmetrical triangle formation that’s been playing out over the last six months. The response to this Ichimoku scan would be iffy and one to patiently watch. Why?

Because of the following reasons:

The stock is consolidating and not trending.The lagging span isn’t in a position that’s signaling (let alone confirming) a bullish development.The triangle is setting up for a breakout.

The Ichimoku Cloud (26 periods ahead) and the lagging span (26 periods behind) may provide you with early trading or confirmation signals once the breakout occurs.

The Bottom Line

The Ichimoku Kinko Hyo indicator, or Ichimoku Cloud, is a comprehensive tool that can yield fruitful trading opportunities, but must be used correctly. Although the cloud’s many moving parts may initially seem daunting, its components can be harnessed to efficiently evaluate current and future price action. This article presented an analysis of a bullish signal—price moving above the cloud—and illustrated how scanning for such stocks can help you cut through the noise of this complex indicator.

However, the scan’s results highlight potential opportunities for closer monitoring, rather than providing immediate trading signals. The Lagging Span plays a critical role here; when all its conditions are met, it indicates strong buying pressure supporting the trend. However, remember that vigilance and patience remain key virtues, especially when the signals indicate a need to wait, as demonstrated in the Blackstone Group example. The ideal outcome always relies on tool efficiency, insightful analysis, and strategic timing.

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

You Might Also Like
  • Week Ahead: NIFTY May Continue Finding Resistance At Higher Levels; These Sectors May Relatively Outperform
  • Is FedEx’s Long-Term Uptrend in Jeopardy? Here’s What to Watch.
  • The Best Five Sectors, #26
  • EQUITIES STRUGGLE AS MORE SECTORS TRY TO KEEP THE TREND AFLOAT
Share
0
FacebookTwitterPinterestWhatsapp

previous post
Indexes Level Off
next post
Is the Bull Market Back? Watch These Charts

You may also like

Poor Natural Gas

January 26, 2023

SEC Greenlights Bitcoin ETFs: How This Major Move Could Skyrocket...

January 25, 2024

Here’s Why the Small Cap IWM Will Soar Nearly 70%...

November 27, 2024

Arista Networks: A Profitable Tech Stock That Has Room to...

November 1, 2023

All-Time Highs and An Upcoming Rate Cut: We’re Just Getting...

June 27, 2025

DP Trading Room: Mega-caps are Showing Bearish Bias

August 14, 2023

The GDP PCE ADP Waltz

August 30, 2023

Equities Hold Firm in “Go” Trend as Industrials Play Strong...

September 3, 2024

These SURPRISING Sectors are Showing Strength

June 4, 2024

Which Will Hit First: SPX 6100 or SPX 5100?

May 9, 2025

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • How to Find Compelling Charts in Every Sector

      July 10, 2025
    • White House accuses Powell of mismanaging Federal Reserve, citing headquarters renovation

      July 10, 2025
    • Italian chocolate giant Ferrero to buy Kellogg’s Froot Loops maker

      July 10, 2025
    • OpenAI to release web browser in challenge to Google Chrome

      July 10, 2025
    • Sports executive charged with bid-rigging in Texas arena project

      July 10, 2025

    Popular Posts

    • 1

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 3,631 views
    • 2

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,919 views
    • 3

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,607 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,577 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,451 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,171)
    • Investing (538)
    • Stock (2,662)

    Popular Posts

    • 1

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 2

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 3

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • How to Find Compelling Charts in Every Sector

      July 10, 2025
    • White House accuses Powell of mismanaging Federal Reserve, citing headquarters...

      July 10, 2025
    • Italian chocolate giant Ferrero to buy Kellogg’s Froot Loops maker

      July 10, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,171)
    • Investing (538)
    • Stock (2,662)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    Analyzing the SPY: How to Know...

    April 25, 2024

    Gold Breakdown

    February 4, 2023

    Stock Market’s Choppy Action Continues: Focus...

    June 28, 2024
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here