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Strategies & Market Trends : Analysis Class for Beginners

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To: Arthur Tang who wrote (1163)	9/13/2000 2:00:46 PM
From: Arthur Tang	Read Replies (1) of 1471

Trend lines in technical analysis is always taught as taking two highest points, connect them to establish the line of resistance. And take the two lowest points to establish the line of resistance. Lines are drawn from the left to the right of the chart. However, life is never that simple. So to be more accurate in prediction of any future reversals, one had to eyeball the two imaginary parallel lines; one just above the highest point and one just below the lowest point. That establishes the sentiment of the market. Rather, that is the range of prices offered by the market makers. This shows the 30% pull back. Overbought and oversold will confirm the limits of resistance and support. If 30% pull back established a support; then breakdown because shorts can not be recovered and/or company continue to have good news, 70-90% pull back from the peak can happen. It is not for the faint hearts. But if you are professional trader, you would be out of the stock long ago. New investor usually takes a few lumps before they have the wisdom to analyze market makers instead of charts. Professional traders can buy directly from market makers.

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