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Non-Tech : Dorsey Wright & Associates. Point and Figure
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To: Lost1 who wrote (2682)12/9/1999 1:54:00 PM
From: Ms. X  Read Replies (1) of 9427
 
OXHP
We'll use this chart for an example as to what signals are given when things
are about to go wrong with a stock.

89 X
88 X O
87 X ------X O ----* ------------------------------------------
86 X O X X O X *
85 X O X O X O X --X O * --------------------------------------
84 X O X O X O X O X O *
83 X O O O X O X O *
82 X O * 8 * O Two triple bottom breaks. One at 82,
81 X * * O the other at 81.
80 ------O ----X ----* ----------------* ----------
79 * O X O * X * X <--Rally here but stops
78 * O X O X X * X O X * X O * at resistance.
77 * O X O X O X O X O X O * X O *
78 * O X X O 9 O X O X O X O * X O *
75 ------------------O X O X O X O --O --O X O ----X O ------*
74 Stock drops after O X O X O X O <--Stock tries to recover but eventually
73 the two triple O X O O O X O X O X another triple bottom break
72 bottom breaks --> O O X O X O X O
71 O X O O X O
70 -------------------------------------------O X --* O <--Double bottom break.
69 Another big drop after O X * O <--Second bottom break
68 the third triple bottom-->O * O and the stock collapses
67 - ----------------------------------------* ----------O ----
66 O
65 - ----------------------------------------------------O ----
64 O
63 What happened here with this stock? O
62 Not only did it break a triple bottom which is O
61 a serious break of support, it also broke the O
60 longer term trend line, the Bullish Support Line. -O ----
59 At the same time it broke another triple bottom. O
60 This is three negatives in a row and plenty of O
57 warning to get out of the stock. O
56 OXHP did try to rally but could never really break O
55 all of the resistance built up in the base around -O ----
54 72 to 79. The final sign was the break of that base O
53 to the downside with the move to 68. O
52 Notice a rally from there to 79 did little to help O
51 the stock. This is where people get stuck if they O
50 are not seeing the whole picture on a chart. A trap O ----
49 into believing the stock is recovering but in O
48 reality they are only short term bounces. O
47 O
46 A person may have bought the stock at 81 thinking it O
45 -was a good price, down from the high but 81 was O ----
44 the sign that the stock was breaking down. O
43 O
42 This chart had investors out of the stock at 81 O
41 well before the major decline. O
40 ------------------------------------------------------O ----
39 O
38 O
37 O
36 O
35 -----------------------------------------------------O ----
34 O
33 O
32 O
31 O
30 -------------------------------------------------------O ----
29 O
28 O X <--This reversal only set
27 O X O the chart up for another
26 O X O double bottom break
25 -------------------------------------------------------O --O
24 B
23 O
22 C
21 O
20 ----------------------------------------------------------O
19.5 O
19.0----------------------------------------------------------O
18.5 O
18.0 --------------------------------------------------------O
17.5 O
17.0 ---------------------------------------------------------O
16.5 O
16.0 --------------------------------------------------------O
15.5 O
15.0 --------------------------------------------------------O Eventually the stock
14.5 O makes its way into the
14.0 --------------------------------------------------------O single digits.
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