Forum Archive Index - May 2002

["andrew cottingham" <arco@adinfinitum.co.nz>]

Brian

Yesterdays candle was a white Marubozu which gapped away and would therefore be considered quite bullish. There was one point that was not bullish - the volume was lower. That would may me wonder if the rally could be running out of steam.

Back to the beginning..........There were a number of buy signals given around 3rd May after a bullish Tweezer Bottom on the 30th April/1st May - those were Para SAR, DMI, RSI, and a few others.

Re support/resistance.

Support is often a matter of personal choice. I see various early supports at RH1A = $2.72, and RH1B = $2.81. Basing supports are at $2.70 and $2.73. I personally like to maintain tight stops so my support would be moved up today and be much higher and I would be using a close below the gap as a stop loss line. (The Japanese consider gaps as support or resistance).

To re-iterate on stops. If I had bought on the various signals given 3rd May my first stop loss line would be RH1A. Once RH1B had been confirmed I would use that. I am not always pedantic about these stops, I will sometimes consider the candle formation and allow a little movement. (Likewise at the top I may sell on a candle signal rather than wait for support to be broken). My stop, presuming the share moves up again today would be the gap. Gaps form support/resistance - so therefore $2.90 - all the time I am locking in profit. If the stop gets hit - I take the profit with thanks. I can play again another day if the signals indicate a re-purchase. All I will have lost is $50 brokerage to buy again - no big deal. The alternative might be to watch the share plummet, ever hopeful it will recover and maybe it will not. Always place your stop on a close BELOW  the support, not above it. Do not get tempted to sell if you see the price is lower than your stop during the afternoon. This may just be a spike, and the bottom feeders will be buying from the desperate. Wait until you see the close, or at least until 3.45pm Aus time.

Ok - now lets take your hypothetical buy at $3. The straight answer is I may not buy now, preferring to wait for a possible retracement.

Hope that all makes sense - If you need clarification on any points please let me know.

Andrew

-- Original Message -----

From: Brian & Fiona Brakenridge

To: sharechat@sharechat.co.nz

Sent: Friday, May 17, 2002 11:29 AM

Subject: [sharechat] WAM Andrew?

OK, the price has now comfortably broken through the two trends we talked about yesterday, one of which was a reasonably long term downtrend.

 

Andrew and others, I'd be interested to know what indicators/candles are showing. I've made a hypothetical buy at $3 with a stop at $2.85 just above the last support of $2.80. I guess being more cautious it would be prudent to wait to see if we see a higher low formed then more highs?

 

I'm hoping this will give longer term investors a comfortable entry. Any comments please.

 

Cheers

Brian

CP11wam.gif

----------------------------------------------------------------------------
To remove yourself from this list, please use the form at
http://www.sharechat.co.nz/chat/forum/