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Strategies & Market Trends : Technical Analysis- Indicators & Systems

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To: Jan Robert Wolansky who wrote (2843)10/19/1997 1:51:00 PM
From: gonzongo   of 3325
 
Stochastics- is a relative indicator with regard to a stock showing within a time frame if a stock is in an overbought, oversold, upmove or down move. We are looking at a 46 day period with this indicator and must recognize that fact. So a stock in a long term uptrend such as RU2000 or Dell will have dips and rises relative to the period in question. The direction of the indicator IMO is the most important factor. A gentle wave on the upside will probably reflect an uptrend, whereas a move below 30 or above 70 will show a "pull back" or strong move up. The key is to study other indicators such as MA's and MACD's to determine where the trend is- and then the stochrsi(34,13) can be used to aid in direction. I always use shorter term Stochrsi's will this indicator to understand the undelying waves based upon varying time periods.

andy
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