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Non-Tech : Dorsey Wright & Associates. Point and Figure -- Ignore unavailable to you. Want to Upgrade?

To: Saul Seinberg who wrote (3527)	12/21/1999 8:47:00 PM
From: Ms. X	Respond to of 9427

Hi Saul, Welcome! First thing to understand about the indicators is they are intended to give you guide to market risk. Once you know what kind of risk you are investing under you can choose the appropriate stocks that will do well in those conditions. Certainly RS in X's is important and a buy signal with the RS shows the stock has done far better than the market and has improved against itself over time. An RS in sell means at some point the stock under performed itself as well as the market. When a stock just reverses its RS to X's that usually means it is at the beginning of a run - and we like that. During higher market risk stocks above the BSL are best and those with strong patterns (higher highs and higher lows). In the case of PSFT you have an RS that just reversed to X's and the trend just broke a spread triple top which has proven to be a successful pattern. I'd have no problem buying this stock now for a trade even with the indicators negative. If you hold the stock I see absolutely no reason to sell or to buy calls against it. Of course knowing the fundamentals of the company is important yadda yadda. Now, if this stock starts to break down on the chart by breaking major support (triple bottom or "cluster" of bottoms) you would want to protect it somehow but I don't see that happening yet. Stop or hedge point would be 18. In the case of PMTC the RS is in X's it is above trend and is a nice looking chart. Again, no reason to sell or buy protective puts unless it starts to break down. Stop for long term or rather a hedge point would be 21. Keep hanging around. I'll be starting a tutoring, class type instruction here on SI in the beginning of the year. Will be great and we'll go from X to O and cover everything possible. Everyone will know PnF as well as me by the end of it :-)