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Strategies & Market Trends : Point and Figure Charting

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To: papi riqui who wrote (22457)	7/20/1999 6:11:00 PM
From: Tammy DeRosier	Read Replies (3) of 34809

Weekly momentum is a short term timing tool that we use to help time the purchase of an equity. The basic calculation is a one versus five week moving average that is exponentially weighted and smoothed. We can not give out the exact calculation. When the one week crosses above the five week moving the weekly momentum is said to be positive. When the one week crosses below the five week, the momentum is said to be negative. Let's say for instance that you were thinking about buying XYZ Corp. The stock was trading above the bullish support line and the relative strength chart was positive and in X's and the sector was good -- in other words, all of the long term indicators on the stock were positive. However, the weekly momentum had turned negative and the stock was at the top of the ten week trading band. That would suggest we stick our order to buy the stock on a pullback. On the other hand, if the weekly momentum was just flipping to positive and the stock was still near the middle of the ten week trading band, we would go ahead and buy the stock at the market. I hope this explanation helped. Tammy

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