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Strategies & Market Trends : The 56 Point TA; Charts With an Attitude
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To: Kulnor who wrote (7600)11/13/1997 2:12:00 PM
From: Doug R  Read Replies (3) of 79429
 
Pascal,

3 1/2 is kind of low, yes. A few points here; 3 1/2 is a horizontal support area. The chart may be starting to form a head and shoulders with a left shoulder and a head. If a right shoulder is formed, the neckline would be across 3 1/2. A break below a neckline at 3 1/2 would be a sell signal. If you went ahead and assumed the right shoulder, a break below 3 1/2 at this time could be taken as a sell signal.

However, as you said, 3 1/2 is low. "Buy low, sell high" comes to mind. You are experiencing the psychological barrier that prevents most investors from doing that. I think a right shoulder (at least) will form up around 4 1/16. Absolute uptrend support is rising at a rate of 13/32 per mo. but that line is well below the current price at 2 23/32 today. RLLY is trying to establish a significant support area to define an acceleration of the uptrend. If it succeeds, this price is a buying opportunity. I really don't have any sell signals in the technicals of the stock. The market is the problem here. I don't like the market's outlook at all right now and I'm inclined to think that the Dow and S&P are setting up a VIMBO. If that occurs, short everything (even POW's). A point and figure chart of the Dow has the first sell signal in a very long time on a box size of 250. For individual stocks I like a box size equal to 10% of the stock's price. With the Dow I think a smaller box size is better for the Dow. The smallest % box size I get no sell signal on is 9.1% On a 9% box size there is a sell signal. Darn those P&F charts!

Doug R

Doug R
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