Forum Archive Index - February 2002

[Phaedrus <Phaedrus@techemail.com>]

Jefley,
        Technically, TRH is still in a confirmed downtrend, and has yet to 
cross the optimised parabolic Stop and Reverse line. The indicators that Nick 
refers to (MACD, Stochastic and DMI) have given many signals while this stock 
has been falling. I have plotted them as arrowheads on the chart below. Even a 
cursory inspection reveals that blindly following any of these indicators would 
have lead to substantial losses, even if they were treated as short-term 
trades. Waiting for all three to agree would still have been a losing strategy, 
as you can see. Indicators such as the Stochastic oscillator always give a 
string of buy signals when a stock is falling, and a string of sell signals 
when a stock is rising. They are therefore most suited to stocks in a trading 
range. Use appropriate indicators, and most important of all, don't try to 
catch falling knives.

  I would suggest the following as possible indications that a recovery has 
begun :-
(1) A close clearly above the current confirmed trendline
(2) A close above the parabolic SAR
(3) A new uptrend (a higher high after a higher low)

 The most prudent course of action would be to wait for all three conditions to 
be met. Good luck!

         Regards,
                   Phaedrus.


 
 

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