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Strategies & Market Trends : Point and Figure Charting

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To: Bwe who wrote (4519)	7/8/1998 4:22:00 PM
From: Bwe	Read Replies (2) of 34811

I own Biogen (BGEN) in my investment club account and I noticed that it was a pick in portfolio #4 of our stock picking contest. I just posted some p&f work for the BGEN thread and I though it might be of interest to otheres on the board. I've edited the post a bit for our thread: I last posted Biogen's point & figure (p&f) technicals on June 21 and it's been onward and upward on BGEN's p&f chart. This will serve as the latest BGEN p&f update and for more background technical information, please refer to Post # 676. P&F charting concerns itself with the ongoing tug of war between supply and demand for stocks. Demand for BGEN, at this time, is clearly winning the battle. BGEN is currently on a buy signal on it's chart from June at $48. The stock has risen 9 straight boxes ($44-$52) on it's chart without having a reversal of at least $3. That would cause the stock to move into a column of O's which represents declining stock prices. The current price objective is $68. Currently only 30% of all Biotech stocks are on p&f buy signals and this is another indication that BGEN is a leader in it's group and also is a market leader. As I've previously pointed out, Biogen gave a relative strength buy signal in March at $48 and stocks with bullish RS will likely outperform the market for the next few years. Biogen is now at a level it was last at in February '97. The overhead supply of unhappy investors who bought at the $52 level a year and a half ago and are looking to get out even will likely exaust itself over the next few days or weeks. P&F chartists draw trend lines to get an idea of where major support exists and also, to get an idea of where a rally might run into some trouble. BGEN's major support (Bullish Support Line/BSL) is currently at $45. A secondary trend line, the Bullish Resistance Line (brl) is drawn from the start of the base of stock prices from April-May '97 at $34. That resistance line is currently waiting at $66. Not so coincidentally, that's $2 below the price target of $68. On the downside, watch $47. That would put the stock in a negative pattern called a High Pole Top. If that were to occur, there's an 80% chance the stock would correct down to the low $40's. Looking good. Let's see how the stock reacts to the earnings announcement. An axiom of p&f chartists is "News on stocks is not important. How the stock reacts to it is important". Take care, Bruce

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