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Strategies & Market Trends : Point and Figure Charting
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To: Ms. X who wrote (250)2/1/1998 7:00:00 PM
From: Allan Harris  Read Replies (1) of 34811
 
As part of my due diligence in analyzing and applying P&F principles, I did a little study today, the results of which seem to be worth sharing with this forum. I took my worst performing stocks from the past 18 months or so and did a backtest based on sector analysis and a particular type of Sell Signal: any SELL SIGNAL triggered immediately following the stock's respective Sector's Bullish Percent reversing down from above 70.

Had I exited these positions on a Sell Signal, when the respective Sector's Bullish Percent had reversed down from above 70, I would have avoided the agony of watching MDCO fall from 35 to 15; MIND fall from 32 to 14, LGND fall from 18 to 11 and RSCOX fall from 17 to 11.40. Similar results seem to hold for the opposite, taking a BUY Signal as soon as respective sectors reverse UP from under 30.

It appears to me that if you just use P&F to take profits on this one type of P&F signal, it is worth every bit of effort and/or expense to study and incorporate P&F into your trading and analysis routines. Being that this is just one element of the P&F technique and that there are several ways to profit from even this one trading signal, it is becoming apparent to this observer that P&F is a robust and dynamic method of analysis.

The more I see, the more I like.

Allan,
King of France
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