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Strategies & Market Trends : Value Investing

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To: Sergio H who wrote (44843)	10/6/2011 1:11:02 PM
From: E_K_S	Read Replies (1) of 78717

Foster Wheeler AG (FWLT) Value Buy : Below $18.00/share Holding period: 24-38 months Price Target:: $36.00/share Possible Gain: 200% Risk/Reward: Excellent When viewed on a five year chart its not clear weather the bottom is in. The Williams %R ( tradeology.com )is a good measure of Market Psychology and indicates the stock is way oversold. The current price does indicate a good "value" entry point. *Market Psychology* Each price is a consensus of value among traders. The recent high range shows the bulls or buyers maximum power. The low of the recent range reflects the maximum power of the bears during that trading range. The most important consensus is as always the closing price. Williams %R compares each closing price to the recent range indicating whether bulls can close the price near the top of the range, or bears can close the market at the bottom of the price. Price may be pushed higher or lower during the day but the Williams %R will indicate which group is actually capable of closing the market. If bulls cannot close the market near the top of a rally they are weaker than they seem and this creates a shorting opportunity. If bears cannot close the market near the lows during a decline then they are weaker than they appear and this creates a buying opportunity. I also track the Volume By Price Frequency Bands. The stock will generally move back to the higher level band where most of the previous Buys & Sells have occurred. For FWLT this is $22-$28 but I would only sell when the Williams %R is around 0 and the price is at or near it's SMA. I would confirm my sell by looking at the PE and Forward PE and their order book. Right now, I am still in Buy and accumulate mode at any price below $18.00/share. EKS

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