The math behind some of these such as the MACD is formidable
but nowadays unnecessary. I used to plot a lot of this stuff
with a ruler, pencil and graph paper. Now, there are many
web sites that allow you to pull up charts with the click
of a button. Stockwatch has a simple but useful charting
program. So does Big Charts, etc. etc.
The MACD (moving average convergence divergence)I find
useful. Again, if I'd been paying attention, I'd have noted
that there was a crossover at the centre line. This is
a strong indicator that the stock is going to go up in
price.
Even if I had noted it, however, it would have done no
good as I was waiting to sell a stock that was moving into
a profit range so that I'd have money for TWG. Had the
target but no ammunition.
There's a whole bunch of these indicators. One by itself
isn't much help. It's when you get three or four all
giving the same signal that there's a good indication of
a buy or a sell. Turns out, for example, that the DML chart hasn't lied.
The price was up again today. However, because I also pay
attention to fundamentals and know that the only play DML
has is its Voisey's Bay property, I'm not willing to add
to my position.
Like I said earlier, these patterns seem to have more
validity with blue chips stocks with significant daily
volume. However, they've often got me out of a stock a
bit early but with a profit and before a breakdown in price.
Trouble with drill hole plays is that trends get broken
by one set of results. Doesn't matter what the trend has
been if the results are no diamonds. |
