Forum Archive Index - October 2001

[Phaedrus <Phaedrus@techemail.com>]

  Hugh Webber likens charts to astrology, and states "I don't use charts..... 
one eventually learns its a waste of time..... counterproductive and 
futile...... one just ignores all charting posts."
  It is, of course Hugh's prerogative to ignore all charting posts. Indeed I 
would encourage him to continue this practice, as his mind is clearly made up 
on this issue, and in any case he has nothing further to learn.
  The charts I have been posting on Sharechat have illustrated the use of 
simple technical analysis in general, and the use of trendline breaks in 
particular, to time entries and exits in the market. How well has this simple 
system performed? The table below summarises the results to date of the last 10 
charts I have posted with trendlines drawn. Entry was made only if the Close 
was clearly above the trendline. The entry price quoted is the Close on the day 
of the trendline break. This is easily effected by placing buy orders at 
Market, just before the close. The current price quoted is the Close on 
26/10/01.

   Stock   Paid     Date      Now   Days  Gain
    NPX    296    23/10/01    305     3     3%
    FRU    152    26/09/01    188    30    24%
    WHS    569    13/08/01    625    74    10%
    SOE    162    25/09/01    207    31    28%
    CLI    280    03/10/01    349    23    25%
    ITC    7.0    25/09/01    8.7    31    24%
    GPG    147    25/09/01    154    31     5%
    AIA    302    19/09/01    327    37     8%
    CEN    327    18/09/01    405    38    24%
    RBC     66    26/09/01     63    30    -5%

 In the light of results such as these, Hugh would have his work cut out to 
persuade me that charting and other technical analysis is counterproductive and 
futile. I personally took the majority of these trades, and am very happy with 
the results. In addition, trendlines have kept me out of poorly performing 
stocks such as TEL.

            Phaedrus.

PS:-  Michael, you are quite right - WAM closed above the trendline on 
25/10/01. This gave an entry price of 247. 
  

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