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Gold/Mining/Energy : Canadian Oil & Gas Companies

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To: Richard Saunders who wrote (8627)	1/26/2002 11:25:42 PM
From: Berry Picker	Read Replies (1) of 24925

Hi Richard. I would love to comment on WRX. It is one of those 'straight up' charts that give people the feeling that it SHOULD retrace anytime now so they are nervous about buying it. What happens is a lot of people just watch and wait for a retrace that never happens and when it does it is not a retrace but straight back down :-) Some of the easiest money is following trading rule #1 1. THE TREND IS YOUR FRIEND but when they see such a strong trend they shy away ( go figure ). There is a very old saying "What goes up like a rocket comes down like a stick" ( from the days when rockets were tied to a stick) It is often true so some care is wise. The daily chart looks like she is ready to take a couple of days to do one of the very minor retraces it has been doing - right away. Thurs and Fri made a bit of a double top so you could see it go back a wee bit ** BUT THIS IS TALKING ABOUT A DAILY CHART. The weekly Chart and (of course you know stronger but I write for everyone who may read ) stronger has not made a lower low for 9 solid weeks. When it did do a weekly retrace it was only for bars and a difference of 56 cents from 3.08 to 2.52 So if you like Elliot wave we have only been making wave #3 or the Mid UP Wave ( always the longest and strongest ) We may be due for wave #4 which is another down wave but if it is in balance with the last down wave #2 we will see a low of only $6.02 as the last was $1.03 in width. That is presuming it started now and we do not see a new high on Monday or Tuesday. If we are not starting wave #4 right now we need to follow the highs up until we see it and redo the math. We also have a weekly low at $5.66 that - if broken - could signal some true down action but technically that should not be expected as this thing is going strong - bad news would be needed for that to happen. It is difficult to give advice to someone if you do not know what they are trying to do. Are you trying to get in. Are you trying to protect profits. Are you trying to day trade for a 50 cent gain short or long? Are you trying to add to a current position. All these things change the advice and time frame. If you have been in a raging bull - it is likely the best thing to let it run. People who start to fear that it is over can follow the old rule of 'trailing stops'. The question becomes "How close should I place a stop" If you get to close a small retrace will kick you out and then you watch it take back off up. If you are too far you lose money needlessly as a closer stop would be better. If you need a stop location then I would suggest the old saying ......."Do go below the low of 3 lows ago"....... To see the that low you can not count higher lows. You must only could lower lows. Lets say todays low is $100 that is low #1 Lets say yesterdays low was $.95 low # 2 Lets say low day before was $.96 that low can't count Lets say low day before was $.97 that low does not count Lets say low day before that was $.92 that is low 3 days ago. In between ones do not count. The only exception to that rule is if the low the day just before low # 3 is a major hook then you should use it instead. NOw then your should have a stop at say 90 cents. If then tomorrow a low of $1.05 is made then move up under the low of $.95 cents by a few cents etc. You then trail the stop up and save what you are making. That is as tight as you ever want to get. Markets need room to breathe and oscilate up and down in the direction of the trend. As you make more money a looser stop will help you catch a larger part of a major trend. Just for fun let's pretend this stock goes to $35 per share. If you have a 10 dollar profit on it you would not want to miss another 15 dollar move trying to save 50 cents. Also adding to positions can be done in the same manner. Waiting for a low of two days ago to enter and a stop just under low #3 BUT ** In a stock that is going straight up like this one - you may just want to jump in and keep a tight stop. I have watch a lot of stocks like this rocket to the moon and everyone phoning me to LOOK at it. Spectators are not speculators :-) Hope this helps. The stock looks really strong. May see a couple of days retrace but trend is definately UP UP UP! Yours B.V. AKA Elect

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