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Strategies & Market Trends : Point and Figure Charting

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To: Ms. X who wrote (681)	2/15/1998 5:23:00 PM
From: Teddy	Read Replies (1) of 34816

Jan, i'm starting to believe in this P&F stuff.<g> A question for you or Tom You wrote: Looking at NE it is having a hell of a time here at 29. It also has big resistance at 30. The RS could be stronger and the daily momentum is negative until 30. If I were considering NE, I would wait to see it break this resistance at 30 by moving to 31 and flipping the daily momentum positive. This would also secure itself above the bearish resistance line... ...Waiting for the break of resistance at least tells you it has momentum and the market is willing to buy past this area. Stop on NE of 25 a double bottom break and below bullish support line. OK, that makes sense to me, but i have one question: Do you make any adjustments for Options Expiration? From my limited knowledge of what traders do, if NE moved above 30.5 before next Friday it would be a blip, so buying above 31 would ensure that you paid the highest price of the week. On the other hand, it is likely that a stop at 25 would get taken out on a momentary slip to 24.5 ensuring that you sold at the low of the week. The theory is basically that if you bought 25calls last week you would take the free short of common above 30.... well, you can work through all the scenarios, but the idea is that profits are locked in whether it closes 25ish or 30ish on Friday. (This is not a manipulation theory, just what i was taught about why the common is usually pinned to the strike at expiration. The general market/sector direction determines it is 25 or 30. It would take very good or bad news for it to not close near one of those strikes.) So what i am trying to ask (you or Tom) is if it might be better to lower both the stop and buy price about 1/2 for the week. Is that against the rules? OT You wrote: I'm trying to figure out how to move to Mars. I figure it will be expensive... Now's the time to get in: alienacres.com <VBG>

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