Forum Archive Index - March 2003

[Phaedrus <Phaedrus@techemail.com>]

Bill,
     Steady! Don't forget that you could not have even drawn the current 
long-term trendline until late 1998. 
"If (I) bought in 1996 (I) would still be holding" Maybe. I would think it very 
likely that many people would have sold when the 18 month uptrend ended at the 
end of 1987.
"...and only touched the LTT once..." That is a minus, not a plus. It means 
that the long-term trendline is only tentative - it has never been confirmed.
"....and held, in all those years." Yes, but look how far from the price action 
this trendline has been for much of that time. For this line to be broken, 
triggering a Sell, you may have halved your investment, giving up all your 
gains, or worse, making a loss.
"...that point would have been an opportunity to buy further stock". It 
certainly would have. It was only obvious in retrospect, though. WHS was not 
even in a long-term uptrend until the end of 1998. (When it made a higher high 
than that of October 1997).
"...for the sole purpose of trading it." Trading is fine, but it is very 
important to be clear about the timeframe and level of activity you are aiming 
at, and your system must be appropriate to what you chose. Traders would not 
have any interest in this long-term trendline - it would have no relevance for 
them.
"Could one suggest that the LTT is the Fair Value line?" I think perhaps it 
would be better represented by a suitable moving average. This is a concept 
used by Alexander Elder. He suggests that buying at or below the moving average 
of a rising stock represents value.
          Regards,
                    Phaedrus.
 

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