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Politics : High Tolerance Plasticity -- Ignore unavailable to you. Want to Upgrade?

To: energyplay who wrote (19060)	3/4/2003 9:35:03 PM
From: chowder	Read Replies (1) \| Respond to of 23153

EP, Sorry for the delay in getting back to you. The trusts are certainly breaking out to new highs. This also means they are overbought. As a rule, when I see overbought scenarios, I start looking for reversals. There are exceptions though and SJT is one of them. Here we have an equity breaking out to a new high on decent volume. Money flows into the stock, as can be seen with the Chaikin Money Flow indicator, are very high. You've got strong relative strength, good money flows and a very strong trend. Most people would be trying to figure out how high it can go from here. My thought process is different. When involved with an up-trending stock, breaking out to new highs, I look for levels of support that could be tested and keep you in the stock. Every stock has a different time frame that shows where one should sell if that specific support level should be breached. With SJT, that major support level is the 30 day "exponential" moving average. The chart will clearly show that it has served as a good support level throughout SJT's rise. You stay with the trade until that support level is breached on a closing price, if you are an intermediate to long term investor. stockcharts.com[h,a]daclyiay[pc30!f][vc60][iut!Ub14!La5,17,9!Lc20]&pref=G NCN is a different story. The MACD is now showing a bearish divergence. (The price is rising, but the blue bars are falling. They should both be headed in the same direction.) This divergence is suggesting that NCN is weakening. In looking for support, the 15 day "exponential" moving average is your line in the sand. Volume is weak, while prices continue to rise. This isn't good. Keep an eye on this one. It's providing clues that it may dip. stockcharts.com[h,a]daclyiay[pc15!f][vc60][iut!Ub14!La5,17,9!Lc9]&pref=G ERF is looking OK here, but has been more volatile than the other two. The 20 day "exponential" moving average has served as a good timing indicator. The chart clearly shows a breach of the 20 day ema was a sell signal. I don't see why it would be different now. stockcharts.com[h,a]daclyiay[pc20!f][vc60][iut!Ub14!La5,17,9!Lc9]&pref=G In summation, when stocks are breaking out to new highs on decent volume, look at various support levels to see which ones kept you in the trend while minimizing risk. Each stock has it's own trading patterns and it's up to us to find them. dabum