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Strategies & Market Trends : Technical Analysis - Beginners

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To: Robert Graham who wrote (7141)	11/30/1997 3:01:00 PM
From: gonzongo	Read Replies (2) of 12039

With regard to price breaks I assume you mean significant increases ( decreases) in price after a stable or basing period. Several books discuss price patterns and their resultant behavior. But basically it is as David said a matter of supply and demand. Let's say XYZ is selling for $10 for some time- then some additional demand comes into the market place such as an interested institution etc. This added demand wipes out supply - then when sellers at that price are gone .... whoop the price rises rapidly. Short covering can add to this demand by creating a second set of "buyers" who have to cover their shorts. Sell and buy targets are set based upon intelligent levels such as a support or resistance level. That is why 50 and 150 day simple MA's become so important because so many folks are looking at them as "buy or "sell" points. So when the supply dries up in either direction- you have a move. Thus volume becomes a leading indicator in many situations. ;;;;;;;;;;; andy btw- I do use Boll Bands ( 8 day variety) mainly to see when it they tighten to predict a move as we are discussing but really do not have a clue as to their benefit otherwise- I prefer MA envelopes.

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