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Strategies & Market Trends : NetCurrents NTCS -- Ignore unavailable to you. Want to Upgrade?

To: Ally who wrote (5288)	1/9/2001 10:39:45 AM
From: Michael Watkins	Read Replies (2) \| Respond to of 8925

Ally: BVF: Worsening TA, and good probabiity of worsening FA... so I've taken a bet and shorted the stock. Your observations? From a TA perspective, typically one would short only after a breakdown of neckline? One of the problems with BVF regardless of where we think it may go is that it is sitting in a big congestion zone. In my view its a dangerous place to be entering positions or taking stands. If one must take a stand, then stops should be rigorous. You can see from the prior swings in this range that it can move big. Now its true that sometimes when the bottom of a range is broken, or a neckline, that the stock plunges and never looks back - 'robbing' us of our opportunity to join the ride unless already in. C'est la vie. What we miss here, we make up for by not being roasted by being too early. I will on occasion enter a trade in the range -- If I saw a stealth bear flag forming just inside the low end of the range I would enter a short on a stock like this but only by following the lows of up bars and if one is breached, then seeking to enter a short. As of yesterday, on the daily chart, BVF put in two up bars in a row. That on itself would normally keep me out from being short. After all, and up bar, means up. We can see it has reached the first target, the 20DEMA. intelligentspeculator.com With the 50DEMA not far away, its likely that some stalling may happen up here, although in smaller timeframes there is a test of a top of range happening right now. Again if the daily chart supported taking extra risk by entering a trade within the range, I would be looking at intraday charts to tune my entry and would have very narrow stops. Possibly if price moves below this consolidation top here on the 15 I might go short and keep tight stops in case of a move back up. intelligentspeculator.com Incidentally on the 15 there is a contraction area marked by the pink lines. We might have expected that to resolve up, but the important thing is that any consolidation area will resolve but frequently also fake to once side or another before making its real move. So you need some if-then-else plans thought out in advance. A final comment about BVF, I don't like to trade stocks that can't maintain a volume of a million shares (preferably two) daily. The charts look and work better but more importantly there will be volume there when we want to get out! Again, I will trade such things but its without much enthusiasm. Too bad for us Canucks that we have limited selection in this regard! I've taken to trading mostly in the US in my RRSP and suffering the odd penalty (although I rarely hold things long enough to cause a foreign capital limit penalty).