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Strategies & Market Trends : The 56 Point TA; Charts With an Attitude
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To: James L. Fleckenstein who wrote (2412)8/21/1997 12:49:00 PM
From: Doug R   of 79274
 
Jim,

IFCI:
That contour is known as a rounded bottom. One of the most lucrative patterns to get into early. The problem now, chartwise and psychologywise is twofold. The double top formed recently is very stiff resistance. When you draw a horizontal line across that top back to late January/early February '95 the second part of the problem will become readily apparent. The fact that there is no resistance between that level and 4 5/8 means there will have to be MAJOR fundamental advances to get past 3 3/4. It's a great example of high risk with the possibility of high reward. The technicals don't currently hint of a breakout. There is no hint of a breakdown either. I'd watch for an inverted head and shoulders to form. The left shoulder is complete and a possible head is apparent now. I say possible because it may turn out to be a second, larger left shoulder. These things are always a bit tricky as they are occurring. I like them better after they have occurred and are in the process of breaking out. Once it is formed, a likely sell signal would be if the price broke below the low of the head. The buy signal would be a move above the line across the highs of the formation which looks to be 2 3/4.

Doug R

PS; My system can pick shorts too. All I have to do is invert the scale that each indicator is scored on, ie 1 becomes 7, 2 becomes 6 and vice versa. Why, is your brother interested? I hear he needs help.
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