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Pastimes : ASK Vendit Off Topic Questions -- Ignore unavailable to you. Want to Upgrade?

To: rx4pain who wrote (18879)	2/7/2001 9:36:03 PM
From: Walkingshadow	Respond to of 19374

Rx, I'd look to close your put position sooner rather than later, i.e. within the next several days. If PFE tests support at the 200 ema, I'd look to cover there, but it may not get there. If you look at the long term chart on PFE, I think you'll get a better perspective: askresearch.com After a severe selloff and ensuing downtrend in Spring 1999, PFE eventually rallied back to its old highs, reaching a 52-week high last July. From there, it settled into a long basing period that continues to this day. Note that during this time the long-term moving averages have converged considerably, and are horizontal. These moving averages have been tested successfully repeatedly, although there were two times when PFE briefly traded below the 200 day ema. There is heavy chart resistance at 46, and solid support at 41 and 42. These are the boundaries of PFE's trading range. Short-term, there are technical sell signals from overbought levels, so from that standpoint PFE is a good short at this time, short term only. But breakouts from such an extended base can be very explosive, and it is likely that PFE will break to the upside out of this base, not the downside. So, if I were short PFE, I would be content with moderate profits. It would not be wise to get too greedy here. The formation is indeed an evening star formation. askresearch.com An evening star formation really consists of three candles: a tall white body candle at the top of a short-term uptrend, then a narrow-range (i.e., short real body) black candle, often with a gap up at the open, and then a tall black candle below the narrow-range candle which precedes it. This candle completes the formation, and confirms the bearish reversal significance of the narrow range candle. The narrow range candle at the top indicates stalled upward momentum and strongly suggests short-term reversal; confirmation consists of the tall black candle which immediately follows. Note that this candle is commonly followed immediately by a small pullback towards the middle of the real body of that candle, so PFE tomorrow would be anticipated to trade around 45 1/2 or so, and close there also. There may even be a white candle tomorrow, but this would not be a bullish candle. Instead, it represents consolidation before continuing the downtrend in the short-term. But again, I see a limit to the downside potential in PFE imposed by the limits of the trading range (i.e., support and resistance), which it has been in for many months now. Bottom line is that the chart, candles, and technicals all indicate that PFE looks to be a fairly good short-term short, but with limited downside, and significant risk of an upside breakout out of the extended base it has formed. JMVHO......... Walkingshadow