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Technology Stocks : Creative Labs (CREAF)

CREAF 0.470

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Jan 12 9:43 AM EST

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To: BZOOKA who wrote (5983)	11/21/1997 9:57:00 AM
From: Jon Tara	Read Replies (1) of 13925

Bzooka, I am using Metastock. I show a stochastic reading as of yesterday's close of 35. Below 20 is oversold. I don't know what parameters Telescan uses, but one must realize that a Stochastic is not a Stochastic is not a Stochastic. I use a 5-period %K with 3-period slowing, 3 period %D. This is the default for Metastock, and pretty standard. This is a popular set of parameters, but so is 14 period %K with 4-period slowing, 3-period %D. When I plug this in, I do get a reading similar to yours. It also seems to be pretty reliable at calling short-term tops and bottoms - BUT it provides false signals as well (look at April through June, when it falsely called two "tops".) The shorter period stochastic is more sensitive, but requires more interpretation. It can't be used alone as a buy/sell signal, but neither can the longer period (look at April-June again!) It will give you more advanced warning (because of the shorter %K) and will show you the tops and bottoms of smaller swings.

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