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Strategies & Market Trends : Point and Figure Charting

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To: Augustus Gloop who wrote (10881)	12/4/1998 11:54:00 AM
From: Ms. X	Read Replies (1) of 34811

RE: Being Disciplined and Dell. Lets talk Dell for a second. I sold based on the drop below 62. I was able to do it at 65 because the pop in the AM was so good. Having said that, I find myself having mixed emotions here. On the one hand it looks like the stock and the market as a whole should trade down a bit. On the other hand it broke 68 yesterday. What do I do. I need to be disciplined. First thing to determine is if you bought Dell for a long term investment or a trade. If long: The major market indicators have not turned only the one short term indicator (10 week) so you know the market may pullback, but not necessarily "correct". The market sector distribution is normal and not heavily weighted to the overbought side. The Computer sector where Dell is housed, is in Bull Confirmed at 60% and in X's. Taking all of this, Dell's support system is in place. No major concerns with the market or the sector. However, with the sector at 60% it is always prudent to buy on pullbacks and not chase the stock. For Dell itself: The chart is erratic and with this much volatility it is good to look at the other box sizes. Just looking at the 1 box size showx that Dell only broke one bottom in an uptrend and this is often false. However, the RS is in O's which is worrisome. Dell has been underperforming which means even as long term you want to keep your eye on it. It just broke a double top putting it back on a buy signal but I wouldn't buy more here with the stop down at 59. You bought at 65 which is fine and you would use 59 for your hedge point. If trading Dell. With an entry at 65 your risk reward is a little heavy but you would use your stop at 59 to exit. This would be the second sell signal and that must be paid attention too especially with RS in O's. The momentum just reversed negative so there may be a pullback coming. What to do in either case is hold Dell. Manage the trade by taking profits if you reach your goal. Resistance at 73. I hope that helped somewhat. Jan I am

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