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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: ynot who wrote (3614)	9/5/1999 2:08:00 PM
From: Robert Graham	Read Replies (1) \| Respond to of 18137

Yes, splits are not always positive. Look at WMT and even DELL for this. And they do feed into the sentiment driven crowd's mentality. This is why some stocks I have seen split by an opportunistic management at something like 60 when they had already established a viable market cap where they can attract the larger players like institutional interest. Further splits IMO would bring them no advantage except for a run in the price of the stock which they can capitalize on. As far as resistance and support levels changing go, this is a normal occurrence over the broader picture of time. This is the dynamic nature of charts that does not get much attention. Some S&Rs disappear which other appear, or even reappear. The causes behind the making or disappearance of S&R would be an interesting topic of study, like understanding the type of price action would show up on the chart that can point to the formation of a new S or R. This gets particularly complex when S&R can at times seem to disappear on an instance basis. Now whether established S&Rs would all change because of a new crowd trading the stock is a good question. My experience is that given time this can happen as the original holders are flushed out of the stock. For instance, conservative long term holders tend to abhor significant volatility. But I do not think this would be an immediate consequence of the new group on the scene trading the stock. My conclusion is that I think S&Rs by their nature have a degree of permanence to them even when the shorter term picture changes for the stock. But they may not always show up where and how a trader would like them to. For example, take a notable sell off of a stock that is much more than just a pullback. How that stock responds to support will now be different even though support is still there. The trader places a buy order right below the next significant resistance. What can happen is that in this particular instance the stock can blast through that former support and stop at a comparatively minor support below where the trader placed their buy limit. But their buy limit still could of been triggered. JMO. Bob Graham