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Strategies & Market Trends : Position Trading Forum
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To: Cyrus who wrote (5754)11/9/1998 12:06:00 AM
From: Doug R  Read Replies (2) of 7247
 
Darrell,

It's rather involved but I find that since stocks exist in a dynamic environment, the static nature of horizontal support/resistance is not nearly as reliable as uptrend/downtrend support/resistance. Taking out that horizontal line leaves the most recent uptrend support just under 14 1/2 tomorrow. When a stock goes into a momentum driven series of trend line accelerations it doesn't use a trend line more than twice. Once the trend is established it logically follows that the next acceleration will key off the second "anchor" of the previous acceleration using it as the first "anchor" of the next acceleration. Most acceleration anchors occur on a shakeout that does not quite reach the most previously set trend line. The low for the second "anchor" of an acceleration almost always finds a price that corresponds to a significant downtrend line and for CPU that corresponds to a line drawn from the high on 10/23 across the high on 11/4.
A break below that line would be a signal to be very cautious.

Doug R
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