Forum Archive Index - June 2001

["Alan Shaw" <alan.shaw@clear.net.nz>]

An interesting post Peter. Can you just enlighten me as to the significance of the 61.8%?

 

Thanks

 

Alan

----- Original Message -----

From: Peter

To: sharechat@sharechat.co.nz

Sent: Saturday, June 23, 2001 8:55 PM

Subject: Re: [sharechat] TLS chart

Those interested in the TLS chart Phaedrus posted the other night should have another look and note the points below. A very interesting chart which tells a pretty compelling story. The prices used in this post are estimated from the chart by eye, so might not be exact. You can see the chart from this link http://www.sharechat.co.nz/archives/current/msg00370.shtml

 

A classic triple top is shown - the three peaks at 920 shown between Feb 1999 and Feb 2000. Three attempts to break through 920 and they all failed. Each failure the price fell back to about 740. When this pattern is broken the retrenchment is usually to a level which happens to be as far below the troughs of the triple top pattern as the peaks were above - one would expect the price to fall to at least 560 ( calculated as 740 -(920 - 740))

 

TLS floated at about 320 in Nov 1997 and rapidly went to the first peak at 920 odd in Feb 1999. The only pauses on the way up are where Phaedrus has highlighted some support levels. The rise was dramatic and as such TLS did not form any real foundation. Some chartists say that when when this happens any retrenchment is usually pretty drastic - there are no levels of real support to fall back on. Mr Fibonacci ( a famous mathematician) would say that in these cases a likely retrenchment level is  550 - calculated as 920 - 61.8% x (920 - 320)).

 

Just happens that the current price is about this level.

 

As TLS has never settled for long at any price anything could happen. As Phaedrus says the next support level is 465. Next step after that is back at 320.

 

The best short term prognosis (from the chart point of view) is that TLS will form a long term bottoming pattern - one that will probably last for some time. The only question is - what will be the bottom?

 

Either way any potential investor needs to take Phaedrus' advice and wait until it stops falling - and starts rising. Even then any significant returns will take some time. I would not say TLS was looking attractive at the current price..

 

Interesting chart - thanks Phaedrus

 

Cheers

 

Peter