Forum Archive Index - March 2004

[Phaedrus <Phaedrus@techemail.com>]

Allan and John,
               For the last few years Sanford has been moving sideways in a 
trading range. This means that trend indicators are not very profitable, and 
oscillators should be used if you are intending to trade this stock. 
 The most marked feature of the chart is the very clear support at $4.70. Eight 
times in the last 3 years SAN has reversed at exactly this level (Right to the 
cent!!!) This means that buying at just above this level should be reasonably 
safe. It also means that any fall below $4.70 is very significant and should be 
acted on immediately. Note the recent resistance - a double top at $5.56.
 Backtesting tells us that the most profitable oscillator for SANstock is a 26 
day RSI. Another good indicator for this stock is an 80 day RVI (Relative 
Volatility Indicator). This is plotted at the top of the chart with buy/sell 
signals marked by black arrows.
 John, the fact that SAN is fairly lightly traded does not preclude the use of 
TA. Low volumes do make a stock more volatile as any decent size buy or sell 
order can push the price around somewhat. One way to manage this is to use 
longer periods with your indicators, as I have done here.
 Allan, there is no such thing as "the best indicator". So much depends on the 
stock, the timeframe in which you choose to operate, as well as whether the 
stock in question is trending or not. Also, it is not good practice to rely 
totally on any single indicator. Get hold of a good TA textbook such as Murphy 
(Technical Analysis of the Financial Markets) and read it cover-to-cover. For a 
start, concentrate on learning the basics of TA rather than zeroing in on 
specific indicators. Most everybody goes looking for the magic bullet at some 
stage or other - it doesn't exist. Every system, every indicator, every 
approach has its strengths and weaknesses. 
 These old notes of mine may give you some ideas as to where to start :-
http://www.sharechat.co.nz/archives/2002/03/msg00009.shtml
 
                  Phaedrus.

_____________________________________________________________
Are you a Techie? Get Your Free Tech Email Address Now! Visit 
http://www.TechEmail.com

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