Stocks Crossing The 13 Week Moving Average <$10.01 Message Board

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Strategies & Market Trends : Stocks Crossing The 13 Week Moving Average <$10.01

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To: zx who wrote (4710)	7/19/1999 1:10:00 PM
From: James Strauss	Read Replies (1) of 13094

MCTI... how safe is it to buy stocks that have risen so far above their base. AG: I usually look at the weekly chart to get a sense of the overhead resistance area... iqc.com As seen here, the 5 1/2 area would offer double top resistance... That puts the reward at 1 3/8 points from the current price... Support is in the 2 3/4 area... That puts the risk at 1 3/8 below the current price... I normally don't buy unless I have at least a 2:1 reward/risk ratio... Here it is 1:1... Also volume is slowing... If it can break through the 4 1/2 area it creates a Point & Figure Bullish Catapult formation, and could be bought... The daily chart looks positive, but more volume is needed... This is sometimes a sign of buying drying up... To answer your original question, many stocks retrace about 50% of their moves before continuing the move... Some just keep going up... Jim

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