The 56 Point TA; Charts With an Attitude Message Board

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Strategies & Market Trends : The 56 Point TA; Charts With an Attitude

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To: scouser who wrote (28254)	4/9/1999 2:49:00 AM
From: Doug R	Read Replies (2) of 79179

John, Most stocks that experience a gap down of 30% or more will signal...perform a technical bounce on the basis of the signal (which is a bottom due to short term exhaustion selling) then continue to trend down to yet another signal which is lower than the first. Lots of stocks do this repeatedly and develop what is known here as a "signal history". CELL has one signal now. Therefore it has no signal history and you must take the signal at face value. Stocks with a poor signal history are to be avoided, stocks with a good signal history are best. Also, truly extreme volume on a signal day often elicits a good bounce. For example, if the signal day volume is greater than that of each of the previous 12 days, it's a "better" signal. Sometimes you'll see it greater than that of up to a month or more of previous. 3 days is the minimum to use. If your use of the word "precludes" is correct (to make impossible by necessary consequence), a signal on a stock with a poor signal history would tend to preclude the probability of a large gain. Doug R

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