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Strategies & Market Trends : The 56 Point TA; Charts With an Attitude -- Ignore unavailable to you. Want to Upgrade?

To: Warthog who wrote (40310)	12/9/2001 9:07:53 PM
From: Doug R	Read Replies (1) \| Respond to of 79273

Wart, JWN: 10/30 to 11/2 ACT 10/10 to 10/19 IL That initial quick minor break over the IL so soon after establishing the ACT is typical of many IL/ACT charts in the early stages. In the next typical step the IL advances significantly higher than it was on that first break while the price consolidates. Then price makes another minor break over the IL and pulls back again. This time price will try to use the IL as support of fall just below it. The 3rd and final break over the IL is the one to watch for starting a short position...when it's well above the IL. From its current position, JWN would get to 40 or higher on that final break. I'd say it's a good speculative long here while using the ACT as a stop. With the ACT at 15.50 and rising (it's always nice to have a rising stop) the potential loss is about $4/shr. A target over 40 puts potential gain about $22/shr. 5.5 to 1 risk reward ratio isn't too shabby and a plan that includes the possibility of averaging down at 16ish and still keeping the ACT as a stop would improve upon that. If it does then actually go into IL violation a sell and reversal to a short position would compound things tremendously...as would covering at the ACT with a reversal back to long for RR. The same considerations hold for the CDIC chart as well. Doug R