Teletek: Big Earnings About To Be Posted Message Board

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Microcap & Penny Stocks : Teletek: Big Earnings About To Be Posted

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To: Tech Bull who wrote (895)	4/23/1996 12:55:00 PM
From: Roger Brown	of 1014

Tech BUll: Harlan: RSI His numbers don't match mine. I'll try to explain why...Let's give an extreme quick example. Say for 10 straight days the stock went up by some amount (the amount of increase doesn't matter.) Then you take a 7 days RSI. Technically, it would be 100 since the average closing price is zero. This though is maningless if it rose say from $8.00 to $9.00 by $.10 per day...If you have a backlog of past numbers (say one month even though 3 is better for interpretation), then you will have a down average. In this case, you don't. This is why Harlan's RSI is artificially high for interprestation to future RSI's on TLTK. Try it for 2 weeks, 3 weeks, 4 weeks, 5 weeks...and so on and you will see that the RSI's for the last date are going to be different each time. But the difference using 4 and 5 weeks is much less. The value in using RSI is its predicting power. One needs history on a particular stock to realize this...that's why i recommend going back 3 months...otherwise, you have less information at your fingertips to make an informed decision.... For Harlan: WHen i first used this i only went back about 10 dates and then realized it wasn't naerly as accuarate as it could be...i kept testing it on this and ASND and came up (statistically) that going back 3 months is a great point to start calculating. Yes, you can do 2 weeks worth, but then you will be lacking the knowledge about what happened on it's rise to 95.6 when it closed at $9.20...From tracking back you will find that the breathing room was gone...no oxygen was available at $9.20 to rise much further. It pretty much went from $2.10 to $9.20 without much RSI rest on the way...this time around though the RSI tells you that we have more oxygen available than at any time in the past 3 months...this means that it can sustain a higer density RSI this time around. How much will it correct and when? Not enough data point unforunately to tell us that. IT has really just started this major move upward since ~2.10...we are breaking new ground. Plus a new set of entrants will follow...but having RSI definitely does help to tell when it's exhausted a down trend for sure....the up trrend is the tricky one...gotta go...

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