Forum Archive Index - July 2002

[Phaedrus <Phaedrus@techemail.com>]

 For the first time this year, BayCorp satisfies the following conditions :-

(1) There is a new uptrend. (Higher High, after a Higher Low)
(2) The price has moved above the 30 day Exponential Moving Average.
(3) The +DI is clearly above the -DI.
(4) The 30 day EMA is rising.
In addition,
(5) Price is above a confirmed trendline.
(6) Previous Resistance at $4.24 has been penetrated.

 Of the indicators being used to monitor this stock, only the ADX is lagging. 
Average Directional Movement Index (ADX) indicates whether the market is 
trending or ranging. So, we have to make a decision whether to buy now, or wait 
for the ADX. Some people ignore the ADX component of the DMI system. Others 
require it to be rising, before buying. Some insist that it is above 25, 
indicating a trending market. Dr Alexander Elder suggests waiting until the ADX 
rises 4 steps off its low (in this case, rising to 20 from its current low of 
16). What you do will depend on your individual level of risk tolerance. The 
more confirmation you wait for, the less risk you will run, but the more you 
will pay.
 The longer the ADX has remained below both +DI and -DI the stronger the 
subsequent trend is likely to be.

                 Phaedrus.


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