The 56 Point TA; Charts With an Attitude Message Board

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Strategies & Market Trends : The 56 Point TA; Charts With an Attitude

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To: ivan solotaroff who wrote (31465)	8/4/1999 2:28:00 PM
From: Doug R	Read Replies (1) of 79326

Ivan, Feel free to edit and embellish: The PGDCEB...Post Gap Dead Cat Exhaustion Bottom. A stock gaps down, from close to open, 30% or more. The volume on such an event is nearly always a significant adjunct to the price activity. Over the next 3 weeks (15 trading days) a down trend often results as more holders steadily throw in the towel and eat their loss. The extreme oversold condition reaches a point of opportunity on a day when a new low is made on greater volume than each of at least the previous 3 days...an exhaustion bottom. On that day, the bid must close off the low. The ensuing reaction produces an average gain of 28%. A stop-loss of just 2 ticks below the signal day low is recommended as long as the break below there is not accompanied by volume that defines another signal. Many PGDCEBs return to new lows after the upside reaction and signal again. These stocks develop a "signal history" which can be very helpful in assessing the potential for a trade based on the signal. A cat with a poor signal history should generally be avoided. Doug R

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