Joseph,
I found a system which closely corresponds with the method mentioned.
1. A long decline (optional) is required, usually ending in a climatic volume.
2. A downside break below the established range (16 cents Geodex), which may or may not be accompanied by heavy volume.
3. There is a post-climax rally, then a meandering for a short time of the price.
4. A sharp upside reversal through the trading range from which the stock has just dipped. The trading range since Dec.9/97 (Agate 4-8 cents). For Geodex, multiply by 4. Ideally, the reversal should be accompanied by strong volume to confirm the significance of the move.
For this system to work, the price should dip below 16 cents. However, at this level, periodic volume spikes have occurred over the past 4 months, which indicates that good demand exists here. It may be difficult to get far below this level. If it does so on large volume, then a selling climax under volume is possible. The system appears to work well in theory despite two strong opposite forces being so close together.
The system advises to buy immediately after the upper trading price has been crossed (32 cents Geodex-my definition). An earlier entry point is also possible under certain circumstances.
On April 23, 37000 shares were sold by one seller, and on May 22, 17000 shares were sold by two sellers. These were not indicative of any selling climax as the price should have reversed, especially after Apr.23. This system does not require heavy volume to call a turn, but requires a dip below the current trading range.
LVL
|
