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Strategies & Market Trends : Point and Figure Charting
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To: genaro who wrote (8111)10/1/1998 8:16:00 AM
From: Mr. BSL  Read Replies (1) of 34810
 
Hi Doug. Welcome aboard.
<<A stock that has a strong short following is going to have a P & F
chart (or any other TA) that will be undiscernible if you do not know the fundamentals.>>

No doubt that fundamentals are essential. Once you know the fundamentals and take a position, then TA becomes the bus driver IMO.
Look at STEI for example. It has great fundamentals and has given many investors a nice ride up for about 6 years. On Wednesday , it broke its Bullish Support Line. Yesterday it fell apart. I am sure the reason that it is falling apart is because of poor fundamentals or poor fundamentals going forward.

The problem is, we don't know what the bad news is yet. We will probably find out today or tomorrow what the bad fundamentals are that are driving this stock down. The bottom line is that if you had a stop in just below the Bullish Support Line, TA would have saved you before the stock tanked.

Another way TA would save you in this stock is if you followed Investors Business Daily's method of watching for distribution days. This stock had five distribution days in the eight days before yesterday. Price/Volume/Distribution/Accumulation is excellent TA.
However, it is too much work!! Point & Figure is the simplest way i know of following the supply and demand behind a stock. Point & Figure tells you when the smart money is getting out before the poor fundamental news breaks.

I look forward to your contributions. Welcome to SI.

Dick
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