Interestingly enough, I just was at the DWA site and noticed that LU had broken its BSL. At first, I found that somewhat alarming, being as LU has stayed above the BSL for the last year, and prior to 10/98, LU had traded above the BSL at least as far back as early 1997 (DWA expanded chart only went back that far).
What I found more interesting was that the last time LU broke the BSL, it reversed back into Xs, broke another bottom (I would imagine it was the 10/8/98 miracle bottom buying opportunity day), and made the last bottom, and has really never looked back from there.
Whether or not history repeats itself remains to be seen (is the short term bottom near ?), but I would not entertain a short on LU here because the stop would be up as high as 71, which is poor risk/reward in my opinion. While I don't have a list prepared, I think there are far better shorts out there, and I would personally stick by the book and look for a RS in Os.
Having said that, if Tom reads this post, where does the new buy point for LU come in, would it be the next buy signal, or do we have to wait for the downtrend to be broken ?
Just some idol thoughts for a Saturday afternoon.
David
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