Hi Eric,
Let's turn it around a bit now and look at the other end of the spectrum, the Bearish Resistance Line (brl), while keeping the concepts we've been discussing in mind.
I'll be using Cliffs Drilling (CDG) as our example. I posted a short while ago about the positive turn the p&f technicals of CDG had taken, the most exciting of which being the upward move through the brl at $54. That brl was a real bummer for the stock as it was drawn from the 11/97 $83 high and on only one previous occasion did the stock even come within a few dollars of breaking through. But break through it did and this p&f chartist was singing a happy tune. To briefly review the rest of the technical picture, CDG gave a double top buy signal at $45 in April. The stock's bullish RS moved into a column of X's and then the number 3 and 4 hitters came up to the plate; a bullish catapult formation at $54 and a break of the brl, also at $54. The stock moved to a high of $57 and has subsequently reversed course, giving a sell signal at $51, with a downside price objective of $47. Wouldn't you know it though, the stock moved back below that nasty brl that "disappears when it is touched by an upward price change".
I've dutifully drawn in another another brl from the recent $57
high, but I'll tell you what, the stock's quarrel is with Mr. $83 brl, not Ms. $57 brl, IMHO.
Eric, Jan, Ben, and all the nice folks on this great thread, I anxiously await thoughts and responses to this topic of great importance to me, the breaking of the major trendlines and their subsequent usefulness and importance as support or resistance thereafter.
Best to all,
Bruce |
