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Strategies & Market Trends : Point and Figure Charting -- Ignore unavailable to you. Want to Upgrade?

To: David N. Jones who wrote (25471)	7/18/2001 10:43:41 AM
From: Bwe	Read Replies (1) \| Respond to of 34811

Hi David, Good to hear from you. I use a stock's RS signals/chart to provide a backdrop for my interpretation of a stock's overall trend. I compare the RS chart against a stock's BLSL/BRRL and try to ascertain the long term trend. I try to be early and buy newly bullish RS stocks, but will buy stocks that have had bullish RS for a while as well. I always try to keep stocks with bullish RS in my portfolio. Where I get hurt with my long term perspective is I'm willing to ride out a stock's move into B- (bullish RS in a down column on RS chart) status which can slice much profit from the cash register. Or, I buy a stock with bearish RS and a belief that I like what's going on in the trend chart and the stock's fundamentals only to be disappointed. This recently happened to me with HAL. Check out how the chart looked in May. All the while the stock had bearish RS and I bought it anyway: stockcharts.com HAL has a ton of horizontal support at current price levels dating back to 1997 and I like the stock here but that's another story. I'll use a bullish RS signal (B+/B-) and the trend chart to determine when I should add to a position on weakness or buy on strength. I'm determined to be committed to a stock for 1+ years, so I'm going to add to a position at some point and also sell from time to time. I use the trend chart and keep an eye on the RS chart, always looking to see if the stock is nearing a RS sell signal. I compare a stock's RS vs the Dow, but always double check and look at a comparison vs the SPX. As Eric said, there are many more moves on a SPX RS chart than vs the Dow. Many RS vs SPX charts look like regular P&F trend charts, often giving buy/sell signals in the same month. That doesn't work for my particular investing style. I use Chartcraft's weekly RS updates to see what stocks, and particularly, what sectors, RS chart signals are occurring in. This also influences the pool of stocks I use for buys and what if anything I should do with my own stocks. As always, the investing process, much like the type of game baseball is, always provides something new to learn and adapt to. It is also very humbling. Bruce