Befriend the Trend Trading Message Board

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Strategies & Market Trends : Befriend the Trend Trading

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To: Dale Wingo who wrote (413)	8/13/1998 10:45:00 AM
From: Dr. Stoxx	Read Replies (1) of 39683

Response to Dale, part 2: Once you have whittled down your list to about a dozen stocks or so (I follow about 15), then print off their charts, using a Stochastics setting of 14 and a MA of 40 days (simple average). The next thing to do is get out a couple of colored pens and a ruler. Draw your channel lines (connect first the price lows over a 3 to 6 month period with a straight line, then draw a parallel line over the highs, trying to connect as closing prices as possible). This gives you a rough estimate as to where the stock is heading, and where are its support and resistance levels. Then draw another line under the Stochastic lows. Once you have done that, note: are the Stochastic lows either remaining at about the same level, or getting lower, while the corresponding prices are getting higher? If yes, this is a very bullish sign. Part three coming up...TC.

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