Forum Archive Index - April 2002

[Phaedrus <Phaedrus@techemail.com>]

Derek,
       You are onto it. You have got three different indicators confirming each 
other. (Trendline break, moving average crossover and RSI oscillator buy 
signal). These signals are confirmed by rising volume.
 There is really nothing much I could add, except to recommend that you use a 
log price scale, rather than linear if you want to use trendlines. In this 
particular case it makes no real difference.
 ".... does TA give any clues as to whether ANP has been overbought?"
The RSI indicator you plotted would define ANP as overbought at any level over 
70. The terms Overbought and Oversold are relative, rather than absolute, so 
you should not interpret them too literally. A stock in an uptrend will spend 
considerable periods of time with oscillators showing it as "Overbought". 
Similarly with downtrends, stocks may be be "Oversold" for extended periods of 
time, as prices track lower and lower. That is why, once a stock starts 
trending, trend indicators have more relevance than oscillators. 
 "Can TA help to predict where to from here for ANP?" 
Some people would say yes to that, and use predictive techniques such as Elliot 
waves, Gann charts, Fibonacci retracement levels etc. I tend to steer clear of 
anything remotely predictive, preferring a totally reactive system. In other 
words, I could not say how far this new uptrend is going to go, but trend 
indicators would tell me when it ends, at which point I would sell. 

             Regards,
                         Phaedrus.

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