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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: danderso who wrote (39767)	2/11/2000 12:47:00 PM
From: StockOperator	Read Replies (1) \| Respond to of 99985

David, How is it that when a stock rises due to a mistake, that peak provides support for later trading. I don't know if mistake is the proper word. I guess it is a mistake if you buy or sell at the wrong time. Think for a second just exactly what a price chart is - nothing more than a visual way to capture the buying or selling (fear and greed) that takes place with any given stock or index. Rapid price swings lead to consolidating patterns which then lead to smaller price moves, breakouts, breakdowns - it's never ending. All to the constant flow of either good or bad news, and most importantly market manipulation by the smart money. These peaks in valleys on the charts are what TA is all about. They are the basis for drawing your trendlines and finding support/resistance areas. In the case of ADSP after such huge price swings you USUALLY see more volatility simply because you need more structure on the charts to lay a foundation for further price action down the road. But like I said there are cases like FLBK where it doesn't happen. In the case of ADSP, because it hasn't broken out yet, it makes sense to watch it daily for signs of strength or weakness. And as far as shorting I wouldn't want to touch that, tops are hard to pick. Let me finish off by saying that I don't believe this stock will see 50 again (any time soon). But hey, stranger things have happened. Good luck. SO