Haim, Glad to see you back on the site. Thought we had lost you with all of your humor.<G>
Thought you might be interested in the analysis of a post from the point and figure charting SI site regarding CA.
Paul V.
Duke60, from Point and Figure Charting, SI, made the
following point from my inquiry. I agree with his interpretation.
Thought you would be interested.
Any thoughts?
Paul
> To: Paul V. (4993 )
> From: duke60
> Wednesday, Jul 22 1998 7:08PM ET
> Reply # of 5047
>
> Hi Paul <CA>. This was a rare case where we did not get at least one P&F sell signal before
> the carnage. IMHO, the value of P&F is that you see the smart money getting out before the
> big drop.
> I have an on-again, off-again study where I go to the library to research the old Investor
> Business Dailies, looking for stocks that pounded 20% or more over a very short period of
> time. From this list of stocks, I throw out all stocks that are not Value 1 or 2, or not above
> their Bullish Support Lines (BSL) or not having an RS in a column of X's. This eliminates
> 90% of the stocks. So far (over 18 months or so), every single stock that had RS in a
> column of X's, VL 1 or 2 and above it's BSL gave at least one sell signal before the damage
> was done. There is an old post where Tom Dorsey, posting through Jan, gave an example of
> how DURA, a strong stock, gave several P&F sell signals before it dove. Wish I could find
> it.
> My point is, that in the vast majority of cases a solid stock will give several P&F signs of
> weakness before it gets killed. CA was obviously the exception. IMO it was the exception
> because the insiders were also caught by surprise and therefore their sales did not come
> early enough to tip off the chartsters. I know that there was insider selling last month, but
> no more than normal.
> Stick to 1) good fundamentals, 2) above the BSL and 3) RS in a column of X's and you will
> probably have plenty of warning before a stock tanks. CA was the exception.
>
> duke60
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