The sensitivity should definitely be set to high for our faster moving stocks.
The medium sensitivity causes signals when the price moves beyond the high/low of the previous three bars. On high sensitivity, it uses two bars, and on low sensitivity, it uses four bars. According to the book, traders will use as many as ten bars for tracking really long-term stuff like bonds, and the overall market.
The historical prices come from Pacific Brokerage. I don't know if their quote system lets you enter anything but stocks, but if they do, give it a try. Since these charts are based on closing prices only, you can chart the trends of mutual funds and other vehicles which are difficult or impossible to get open,high, and low prices for.
You're right about VVUS; on the high sensitivity stock a buy signal was generated when the price moved past ~$12.50, which probably happened around New Years. According to the candle chart, the price has dropped since then, but it hasn't closed beneath the bottom of that last white bar on the TLB chart, so the buy is still in effect.
If you buy, be ready to sell at ~$12, if another black bar shows up.
The medium sensitivity chart looks like it'll give a buy signal at just under $13, which is the high of the last three black bars.
SKM: The last buy signal was about $6. It looks like there's resistance at $7, so I wouldn't buy in now. Watch for a black bar, then buy puts or sell short. You should be able to ride it down to $5.
DBRN: Again, we missed the ride up; the buy signal was down near $23-$24. The candle chart looks like the trend is turning around, though. Look for a sell signal at a close below $26.
ROST: Looks like it's forming a pattern called a "White Suit". The small black bar is the shoe, the long white bar is the suit, and another white bar will form a neck. This would be a very bullish pattern.
Doug. |
