The MACD has basically areas of support and resistance, just like the price patterns of stock. So even though the price is at a all time high, the momentum as represented by its MACD is just reaching its high. You will find this type of relationship with price to also show up with the Price ROC, another form of momentum indicator.
The MACD tested its previous resistance at about 0.43 in Sept, and previous to that the resistance at about 03. in May and another time later in June whwew it successfully broke through. I consider the resistance at 0.43 significant since it was the MACD's last high when it last upcycled only a couple months ago.
I would like to make a note here that I made a mistake in saying this stock has been in a constant uptrend. Looking more carefully back a couple years ago, I see this stock has been moving in a range with an upward bias. But calculating the moves on a percentage basis, each cycle up doubled the value of the stock even though on a point basis it looks different. I am used to dealing with stocks over 20. Still, I should of been more careful. Sorry!
My BTS system is a way for me to trade on breajouts. I have been working on it only recently and with stocks like ROST, VVUS, and ADBE, has done well. PTIS is the first low cap and low priced stock I have used it on. So the results should prove to be very useful to me.
The problem I have been having is describing what I see visually in a formula so it can be used in a mechanical system. Also, when it comes to volitile stocks, they do behave differently than less volitile stocks that will trend more (less horizontal movement to its vertical movement). I have been working on a way for a system to mechanically recognize valid breakouts early and just filter those out from the price history of the stock. This has proved a difficult chore. Volume does not necissarily increase and the trading range for a day does not necissarily increase when the stock spikes up. However, I do find this behavior with when the stock breaks out of a resistance area. Still, there is no way that I am aware of for me to have my mechanical system recognize those points of significant reistance. I may have to look for the large price movement and volume increase already into the breakout. This will clip out the potential profit that I can make on these breakouts.
Yes, it is nice to see this thread active again.
Bob Graham |
