Forum Archive Index - April 2002

["Nick Kearney" <nickk@quicksilver.net.nz>]

Phaedrus

Maybe you have been confirmed right this afternoon.  Closed even at $2.81
after being down 4c all day.  Obvious support there.

Cheers

Nk
----- Original Message -----
From: "Phaedrus" <Phaedrus@techemail.com>
To: <Sharechat@sharechat.co.nz>
Sent: Thursday, April 11, 2002 3:10 PM
Subject: [sharechat] FBU Chart


> Jeffley,
>         You ask "how often are the indicators that made fbu seem like a
good thing wrong?!  are you still positive about fbu?"
>   I am never positive about anything. Fairly sure is about as high as I
go!
>   The FBU buy was based to a large extent on an RSI buy signal. How good
is this indicator with this stock? Excellent, as good as it gets. Don't take
my word for it though. Take a look at the chart below. On it is plotted
every RSI signal ever generated by FBU, using only the default indicator
values. (ie nothing has been optimised, or curve fitted in any way) Some are
spot on, some are missed, some are early and some are late. Overall though,
I am sure you will agree that every single buy or sell signal was at least
approximately right. (The plot itself changes colour whenever the indicator
becomes overbought (red) or oversold (green), giving warning of an an
impending signal).
>   The real proof of the pudding is in the eating. How well would you have
done financially by blindly following these signals over the last three and
a half years? Say you bought $10,000 worth of FBU at the close on 1/7/98,
and kept reinvesting the proceeds. The following table shows all trades
taken. The first opposing signal was always acted on, buying or selling at
the close on the day of the signal. Brokerage was taken at the flat rate of
$29.50 per trade. Dividends were ignored, as was any interest earned on the
money when it was out of the market (about 60% of the time). The initial
stake of $10,000 would currently be worth $32,929. By my standards, these
are good results, and RSI a reasonably reliable indicator to use with this
stock.
>
> Shares  In   Out    Buy      Sell     Gain   Profit%
>  3910 255  300  $10,000  $11,701   $1,701   17.0%
>  5403 216  286  $11,701  $15,424   $3,723   31.8%
>  6361 242  310  $15,424  $19,690   $4,267   27.7%
>  8091 243  260  $19,690  $21,007   $1,316    6.7%
> 10385 202  229  $21,007  $23,752   $2,745   13.1%
> 12228 194  217  $23,752  $26,505   $2,753   11.6%
> 11124 238  300  $26,505  $33,343   $6,838   25.8%
> 11855 281 (278) $33,343  $32,929    -$415   -1.2% (Current trade)
>
> Buying and holding would have seen your $10,000 grow to $10,840 in the
same time.
>
>  So, do I follow RSI signals with FBU? Yes. Did I buy at 281? Yes. Am I
sweating over a 3 cent drop? No.
>  I am fairly confident that as an entry point, 281 will prove to be at
least approximately right. Time alone will tell.
>
>      Regards,
>               Phaedrus.
>
>
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