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

To: NucTrader who wrote (57086)	7/23/2000 3:30:00 PM
From: Haim R. Branisteanu	Respond to of 99985

The Hidden Language of the Charts The authors have done so with five popular but previously elusive chart patterns, known as head and shoulders, broadening tops (and the related bottoms), triangles, rectangles and double tops (and the related bottoms). After defining them mathematically, the researchers back-tested the patterns' predictive prowess on price data for 750 stocks over 35 years ending in 1996. One of their findings is that the patterns predict the future direction of Nasdaq stocks better than they do exchange-listed issues. Some that seemed to work well as buy or sell signals for Nasdaq shares failed utterly when applied to exchange-listed stocks. More research is needed to determine why that should be so. Of the five patterns studied, two worked particularly well with both kinds of stocks in forecasting price weakness: double tops and the so-called head and shoulders -- a pattern in which a stock rallies and falls back again three successive times, with the second of the three rallies (the head) advancing further than either the first or the third (the shoulders). nytimes.com