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Strategies & Market Trends : Technical Analysis- Indicators & Systems
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To: Jan Robert Wolansky who wrote (2827)10/12/1997 10:19:00 PM
From: gonzongo   of 3325
 
Jan- I hope not to offend you as I do not know your knowledge base. StochRSI is an excellent overbought/oversold indicator. It is more refined IMO than a straight stochastics- but it is useless without trend indicators. It cannot tell an uptrending or downtrending stock apart. Your idea about using it with DAHL is good but the time periods are so far apart that it will not work.

What I use is as follows:

A price candlestick chart with 8-21-55 and 89 day weighted moving averages. Now you can substitute Time series or Variable MA's - it only matters that you look consistently from one chart to another. I have gotten used to weighted, Richard prefers the tighter VAR MA's which WOW ( my software program) does not have.

8 day bollinger bands

stochRSI(8,5) and StochRSI(13,13) or (13,8) - You might want to add a StochRSI(34,13) as well. 3 indicators will give you a feel for 3 different time periods. The 8 day alone usually misses parabolic rises but the 13 and 34 can keep you in longer.

Now study charts and either with MA's on a price chart or MACD indicators- watch what happens when they are in different locations.

If you get 3 oversold StochRSI's together and an uptrending series of MA's- you can get a powerful move-

So first- using DAHL or another long term indicator- see where trend is- I use the 55-21-5 straight stochastics myself but Dahl is also very very good.

Then determine that the trend is intact by looking at the Moving averages

Thirdly view your OB/OS indicator to determine that entry is good.
Make sure to look at volume as well.

So good examples to look at are UIS at 11 PETD at around 6 ALNK around 20......

that's it.

andy
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