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

To: Gary E who wrote (6645)	3/28/2001 3:49:33 AM
From: Michael Watkins	Read Replies (1) \| Respond to of 8925

Hal, Sure, pick MSFT... more gaps than a 5 year old after another visit with the tooth fairy. ottographs.com The important thing to remember about ADX is that it can tell us four things: - its in a directional up move - its done doing up, for now (or for a while) - its in a directional down move - its done doing down, for now (or for a while) Find the peaks in ADX where ADX reverses quite sharply and then look for relative lows on ADX. See if the area bounded by those two points coincides with a consolidation pattern of some sort. ADX, and volume of course, are useful aids in picking out consolidations patterns on a chart. Looking at the MSFT chart posted, you can see areas of trend directionality as indicated by ADX corresponding with some significant, highly directional, moves. The last few months are a consolidation but of what type? I see a H&S, perhaps a triangle, some convenient trendlines for the trendline breakout players. I ended up drawing the triangle as shown because ADX supported it but perhaps more so for the two bar poke below the lower trend line. That little poke below a consolidation that ran for a couple weeks trapped some sellers and it moved right up. Now the upper trend line is being tested, surely some sellers and some 'breakout' players will show up right about now. We can let it make its move and position ourselves to take advantage of a failure there or a successful breakout and buy a retracement later. This message from Teresa a few days ago had some useful charts and links in it: Message 15520688 Particularly this one, with the 'its going up directionally' / 'its not going up anymore' etc view on looking at ADX. 204.244.168.151