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Technology Stocks : Full Disclosure Trading
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To: advocatedevil who wrote (3453)12/26/2002 10:58:42 PM
From: Return to Sender  Read Replies (1) of 13403
 
OT: Actually your thinking lines up almost exactly with mine. Unfortunately for both of us makes it more likely that we will be wrong... no fault of yours though because I am almost always wrong.

Fortunately charts do not lie.

Neither does technical analysis. Unfortunately technical analysis is subject to subjective reading. Worst of all it is subject to future events.

Anyway, here is an interesting observation that I think both short and long investors could profit from if they would like to try it. The 5 day 15 minute chart from StockCharts.com almost always gives an investor a chance to profit from a contrarian frame of mind. All we need to do is watch for shorting opportunities when the stock or index is above the upper Bollinger Band with an RSI approaching 70 or above. Note that AMAT above 14.20 today certainly qualified:

stockcharts.com[h,a]faclyyay[pb20!b50!b200!c13!c20!c50!i!d20,2!f][vc60][iUb14!La12,26,9!Lg!Li10,10!Lh5,5!Lp14,3,3!Ll14]&pref=G

On the other side of that coin is the opportunity to profit from a short term rise when a stock is oversold. That is to say the when the stock price is below the lower Bollinger Band with an RSI approaching 30 or below. The penetration of the lower Bollinger Band could be next for AMAT if it continues to decline tomorrow morning but we will have to see a good deal of selling to hit an RSI of 30 or below on this short term chart.

By adding short term contrarian indicators like the TRIN and the TRINQ we may be able to perfect this to an even higher degree. Lately a TRIN over 2.0 has resulted in a rally. A TRIN below 0.50 has begot a sell off. The TRIN was below 0.50 today while the market rallied hard but it could not hold. Note that today's close was not nearly negative enough yet at 1.15 to predict a rally at the open but going short if this reaches 0.50 or below would be a winning play. Go long if we hit 2.0 or more but best if the market washes out above 2.5 here of late because the rallies are not likely to stick in my opinion.

finance.yahoo.com^STI.N&d=c&k=c1&t=1d&a=v&p=s&l=on&z=m&q=l

Note for those who have MEDVED QuoteTracker you can find the TRIN in your indices under VIEW in the top menu bar. I think it is worth following.

RtS
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