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

To: Colin Cody who wrote (24482)	11/21/1999 12:48:00 AM
From: kaz	Respond to of 34827

Hi Colin, Well, I had a really complete response written but Netscape crashed just before I submitted it. So, I made myself a root beer float, and now I'm ready to try again. In general, 74 would be a good triple top buy signal. WEBT is a strong stock in a strong sector in a strong market. There is one little problem with buying at 74. Where do you put your stop should it reverse down? Would you get out at the first 3 box reversal, or ride it down hoping it won't violate the previous low at 55? Assuming it does hit 74, strict Piffers would probably wait for it to reverse down and then buy on the first reversal up. That way the stop point is known and a price objective could be calculated. Thus, you could decide if the risk is worth it. Consider if you were a real gambler and decided to SHORT it at 69 with the hope that WEBT wouldn't surpass its previous highs. You'd hang on until 74, then you'd cover immediately. So, even though it might not be the smartest thing to short a strong stock in such a market, at least you'd know what your dollar risk is. Right now, you only know that if the stock hits 54, a sell signal would be given. That's more than 15 points from where it is now and 20 points from the actual buy signal, kinda steep since you can't even guess as to how high it might go. I am fairly new to P&F, so you should definitely get the help of the more experienced folks when they return from this weekend's Vegas blow out. My own experience thus far has been quite positive. I have failed to get in on some big moves, like MYG. But I've also avoided big losses (I was stopped out of WMI at 31, the absolute low for the day. The very next day it opened at 25 and has since gone as low as 14.) P&F isn't quite as exciting as day trading was, but it's also not nearly as painful. Regards, Paul Kaz