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Strategies & Market Trends : Point and Figure Charting -- Ignore unavailable to you. Want to Upgrade?

To: Dave Shares who wrote (23540)	9/4/1999 11:03:00 AM
From: PuddleGlum	Read Replies (1) \| Respond to of 34809

Dave- One does not have to wait until a stock's chart is back in X's to initiate a position. Witness HAL, which hit 50-51 several weeks back, at which time DWA featured it in the Afternoon Call and suggested that 45 would be a good entry point. Well, it's at $45 and in O's (but RS is in X's), so it's a fine entry right here. Just note the sector BP is kinda high. I'm in AMGN, too, as my 2nd largest holding right now. $78 still looks to me like the appropriate stop level, which will leave one of my entry positions at a loss. It would be quite reasonable to see the stock pull back to 81-82, but as you noted the chart looks very strong, and the sector has been going gangbusters. pg

To: Dave Shares who wrote (23540)	9/7/1999 12:09:00 AM
From: Ms. X	Read Replies (1) \| Respond to of 34809

Hi Dave, Of course you know what I am going to say.... "Look at the whole picture". With ASDV the RS was/is in X's and it had given a bearish signal reversal signal prior to its move back down to the bullish support line. Also it has a nice history of staying above the line. So yes, you can buy this when it pulls back to the BSL. You could have placed an order in at that level and waited to see if it grabbed it or do as you have done and wait for the three box up. Both are correct answers. If you aren't trading by the skin of your teeth (I never really understood that phrase) then the three box would take too much out of your profits - but since I don't day trade really, the three box is reasonable to me. It gives you a little extra guarantee that it is moving up but again, with the other signals and RS positive a guarantee was absolutely necessary. With AMGN 78 is too close of a stop IMO. Look at the chart. It has been in an uptrend with only one bottom break which turned out to be a shakeout. If you put your stop in to generate at the firts sell signal in an uptrend especially if the RS is in X's, you are setting yourself to be shaken out. The trade stop is 77. I understand about not turning winners into losers but you have to give a good stock room. Look at the normal swings of the stock, in AMGN's case that is 5 to 6 points, and judge from there (also with the rest of the analysis). Depends on your plan. Are your really trading for just a few points? If so take the profit at 5 or 6 or whatever you get and not worry if the stock goes up or down. If trading you should buy only at support as close to a stop as possible - in AMGN's case that is around 78. If longer term look at all of the support AMGN has around 73 and up. If I had this in a portfolio I wouldn't worry a longer term picture on AMGN unless it broke all that near term support or reversed its RS to O's. If the RS reverses to O's you obviously want to tighten up stops. The immediate above is how I would evaluate AMGN. In evaluating I first decide my position, trade or longer term (which is decided on fundies). If a trade I buy close to a stop point and use a vertical count or trading band to decide my price objective. If I'm firm on the PO I set a sell order in for that price. If I want to "see how it goes" I set a trailing stop but I'm finding those more difficult to use because of the volatility in this market - it is worthwhile though for those more "nervous" about the volatility. Takes the decision away from them because the trailing stop is set at a profit level so it is an almost "no lose" situation. If I want AMGN longer term I look at the base of support (above 73) and use that for a guide. There is no way I'd set a stop at 77. Look at Cisco as an example. If you had set a stop at the first bottom break or the second you'd have missed a Hell of a run. How did we know? RS in X's, above BSL, large base of support etc. Same with AMGN right now. I hope that helped you Dave. If not and if I can clarify anything please let me know. Remember folks, stocks will break bottoms in market volatility. Always look at the indicators for your guide. If the indicators were all negative and AMGN RS went negative (in O's) I'd say set the stop in to at least cover the position. With the short term indicators positive and AMGN with a positive RS I'm more likely to give it some breathing room to move with the market.