Jan,
Even though I don't use the DWA site yet (I intend to eventually), I add my congrats and thanks for your efforts.
Maybe if I did use the site I would not have to ask for you help in understanding P&F better, but c'est la vie!
A few weeks back you kindly gave me your read on 2 stocks I have been following, e.g., GIFI & MYL. In post #2112 you advised that the oil services sector looked great but that GIFI did not. Preston (post #2306) and you (post #2562) both advised that MYL was trending down with neg. RS etc. (I'm paraphrasing and condensing these posts but I think they convey the gist of what was said). Since these posts, both GIFI and MYL are up substantially. In fact, both have broken thru significant resistance and MYL has blown thru multi-year tops to establish a series of all-time highs.
Let me make clear that I am not questioning the validity of P&F or criticizing your interpretations in the case of GIFI & MYL, but I would like to have a better understanding of P&F. When I asked for a P&F read on these 2 stocks, I did so thinking that other indicators (stockastics, MACD, support/resistance, fundamentals, etc. were giving positive reads. Hindsight (being 20/20) suggests that these reads were accurate at least in the short term. By comparison, the P&F reads, while not inaccurate, seem to be more of a lagging indicator or, perhaps, a confirming indicator of events after they have occurred. While this is helpful in confirming long-term moves in stocks, it does not seem particularly applicable to the short term trading of stocks, particularly those which bounce up and down in a trading range.
The P&F read on MYL is particularly confusing. Is a stock that goes straight up from 17 to 30, blowing thru major restistance at 25 to make a series of all-time highs really in a P&F downtrend. And if you should wait until the RS turns positive to buy such a stock, will you not be missing a great deal of the upside as you would have over the past several weeks? What am I missing?
HELP!
PR |
