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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA
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To: magicslr who wrote (32)6/3/1999 9:40:00 AM
From: Matthew L. Jones  Read Replies (1) of 19219
 
Mita,

If you look at this chart: bigcharts.com

you will see that I have placed upper and lower resistance and support levels as well as a 10 period EMA and a 20 period EMA. Below that I have included RSI (Relative Strength Index) which is a fairly good indicator of "over bought" or "over sold".

Based on my read (I hope I'm not over stepping here, JT) I would say it might be a buy for me at or below 13 on ascending RSI only. My guess is that it will touch or break out of the lower band and snap back immediately beyond the mean and ultimately to the upper band. I would place a buy at 12 7/8 and look to sell when it breaks 17 1/4 for about a 2-3 week trade. My guess is that when RSI approaches 80 I would begin looking for the exit whether it had gotten to my price or not. On the other hand, if the sideways trend starts to pull upward, the resistance level may raise to a higher level exit target, but watch RSI. As you can see, the RSI has only touched 80 before reversing just before the middle of April. The most recent near term high, RSI only got to around 70 before reversing.

One final word of caution would be that currently the stock appears to still be descending slightly. If you buy today, you may very well be a day or two early. I'd watch for a reversal in RSI and a touching or break through of the lower band (12 7/8) before I went long. Certainly you understand that this is merely my "opinion", and I would like to see feedback from others on the thread to compare other takes on the same stock.

Hope this is of interest to you. MLJ
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