[question on trendline example] first question is, how far do you go back and why? For example, if company/industry business or market conditions have changed materially 12 months ago make going back 2 years on the trendline irrelevant? Honest question since I probably look at this subjectively & inconsistantly.
Secondly, should you make an effort to look at only closing prices?
in the ISIP example, the stock roared up in early trading when word got out the CEO was going to be interviewed on squakbox, and plunged when he was not able to communicate a complex, revolutionary therapeutic approach in the timeframe. But since I knew the situation, I intentionally ignored the daily high in drawing the trendline, while potential investors considering ISIP would probably not unless they had been following the issue closely.
In my recent assessment message to you, I just went back to Oct 97 and looked at closing in drawing the trendline, when I commented that it appeared ISIP had just crossed the declining trendline. The market appears to be responding well today (up 5/16 on strong volume for ISIP).
So, I guess the summary question is - am I being too subjective in drawing trendlines? Am I erring by integrating to many other factors into TA?
Open for input, Scott
BTW, thanks again for you continued educational efforts, Professor Trinidad |
