To: Katie Kommando who wrote (3006 ) 8/11/1999 10:19:00 PM From: Jeffrey L. Henken Read Replies (1) | Respond to of 3514
Katie I think we should take some time and discuss how to use technical analysis for stocks for anyone interested. Lets take SYCD as an example looking backwards and see if we can help others to see what you were seeing at the beginning of July:bigcharts.com I used bollinger bands and MACD. The bollinger bands were constricting by early July and continued that way until it broke out to the upside this week in a big way.Here is why :An important thing to keep in mind is that Bollinger Bands do not generate buy and sell signals alone. They should be used with another indicator. I prefer to use Bollinger Bands with RSI. This is because when price touches one of the bands, it could indicate one of two things. It could indicate a continuation of the trend; or it could indicate a reaction the other way. So Bollinger Bands used by themselves do not provide all of what technicians need to know. Which is when to buy and sell. MACD can be substituted for RSI. However, when combined with an indicator such as RSI, they become quite powerful. RSI is an excellent indicator with respect to overbought and oversold conditions. Generally, when price touches the upper Bollinger Band, and RSI is below 70, we have an indication that the trend will continue. Conversely, when price touches the lower Bollinger Band, and RSI is above 30, we have an indication that the trend should continue. e-analytics.com Almost everything a person could want to know about technical analysis can be found at the site at the URL listed above. Those who want to make a dedicated effort at discovering how to use this tool will end up much better off for it. Anything you would like to add would be appreciated!!! Thanks, Jeff