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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: IQBAL LATIF who wrote (29802)	11/23/1999 9:30:00 AM
From: IQBAL LATIF	Read Replies (2) \| Respond to of 50167

Q. What are money flow ratios? Can they be used for buy and sell signals? ? Ellis H. A. Money flow ratios indicate the strength of the money being put into -- and taken out of -- a particular equity. You can calculate money flow by multiplying a stock?s daily volume by its average price (the average of the stock?s high, low, and closing prices). Here are the basic scenarios you'll encounter: If money flow is positive on a day a stock is trading down, money flow tells you the stock will likely turn around. If money flow is negative on a down day, money flow says a negative trend will continue. If money flow is positive on a day a stock is trading up, it's a sign of a continued upward trend. If money flow is negative on a day a stock is trading up, it's a sign the upward trend won't continue. Positive money flow occurs on days where there is an increase in average price. Negative money flow occurs on days when the average price declines. Like this Article? The final money flow ratio is calculated by dividing positve money flow over a period of time by negative money flow over that same time and multplying the resulting figure by 100. This calculation is the only ratio that is truly relevant to money flow analysis. As for specific sell or buy signals, here's what to look for. A stock (or a market) top is generally signaled when the money flow ratio rises above 80. According to money flow analysis, a stock with a money flow ratio above 80 should be sold. Conversely, a stock with a ratio below 20 has bottomed and should be bought. Note that when a stock or index reaches an upper or lower limit on very heavy volume, the trend might be about to reverse. A difficult topic, Ellis. Hope this helps. Chris Bulkey Senior Research Analyst