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Non-Tech : 100% + Gain, in 72 Hours or Less

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To: Instock who wrote (355)	1/4/1998 11:35:00 AM
From: Dave H	Read Replies (1) of 1488

DRMD RSI... In, note the 3-day RSI is setting up a "hinge" which is usually an indicator for a reversal. I'm using 3 day here since it should be more sensitive to the last three day's movement. More from DeMark -- overbought/oversold absolute levels are much less important than watching the reversal from overbought/oversold. A stock in overbought levels can remain there for quite some time, especially off-the-chart levels which indicate that there's a herd mentalitity moving in or out. The important thing to look for is when the indicator drops back below the overbought/oversold level. For RSI, as an example, if you use 70 as overbought, watch for the indicator to cross back below 70 and that's the indication that the trend is reversing. However, DeMark warns that if the indicator goes "off the chart" (ie to 100) for more than a day, you have to treat this situation with caution and crossing back below 70 might not signify the reversal...you'd need another more moderate high above 70 first before expecting a true reversal. DRMD so far hasn't hit the "through-the-roof" levels on overbought, which implies a reversal could take place as long as we don't have another buying surge first.. -dave

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