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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (40857)	3/26/2005 6:30:58 PM
From: chowder	Read Replies (1) \| Respond to of 206325

Paul and xxreno, in looking at COP from a technical point of view, one would have to admit that in order for a stock to enjoy a strong Stage 2 uptrend, the indicators would have to show strong readings via momentum indicators and strong money flow readings. In January of this year, COP broke out above the upper momentum band on strong volume. MACD was showing the trend increasing in strength and money flows popped positive. It was a great buy confirmation signal for those who wished to own it. And as they say, "there's goes swifty" as COP stretched out to new highs. COP stayed above the upper half of a rising momentum band and money flows continued to get stronger. On February 22, we see out first clue that the run is getting a little extended. The candlestick on the far right is indicating that the bulls are running out of gas. What makes this signal noteworthy is the volume on that day. It was the first clear sign that institutions were starting to sell. The next day or two confirmed that and I was then saying some profits should be protected. stockcharts.com[h,a]daclyiay[d20041126,20050222][pd10,1!b20][vc60][iut!Lah10,30,5!Lc20]&pref=G As I move the chart up to date, note the change in character of the patterns, price just sitting at the lower momentum band which is now declining, MACD decidedly negative and money flows just popped negative. It's the inverse chart of February 22 when the Stage 2 uptrend began. stockcharts.com[h,a]daclyiay[d20041226,20050326][pd10,1!b50][vc60][iut!Lah10,30,5!Lc20]&pref=G As it turned out, the sell signal was an accurate one. Those that took 1/4 to 1/3 of a position off the table made the correct move and now COP is at an inflection point. It needs to reverse now or additional profits are going to be lost. Now keep in mind, when using the daily chart for analysis, it's only good for short term moves. I realize there are those who are holding longer term and must sit through the noise of the short term traders. So let's look at the weekly chart. The weekly chart confirms the signal provided on the daily chart that price was a little extended. We see a topping Doji 4 weeks ago and the following candle confirmed there was profit taking going on. The last three candles have created what looks like an oreo cookie. This is a bearish set up and since the set up is coming at an extended point from the 20 week moving average, odds are suggesting COP comes down to test the 20. This would be a normal correction in a stock that is still in a Stage 2 uptrend for the longer term time frame. stockcharts.com[h,a]waclyiay[d20040326,20050326][pb20!b40][vc60][iut!Lah10,30,5!Lc20]&pref=G I don't own COP and I'm not short COP either. However, from a technical point of view, this isn't where I would be buying more. Since the stock is still correcting, I would be saving the juice for the test of support. Regardless of whether one is a short term or long term trader, buy and sell targets have a greater percentage of success when they trigger at support or resistance levels. Let me provide an example using COP. Assuming you are looking long term, we'll stick with the weekly chart. Long term positions should trigger off long term charts. COP is showing weakness on the weekly chart. It doesn't suggest one should liquidate. It is merely suggesting that longer term, we can expect COP to come down and test the 20 week moving average. It always does! Always! Sometimes it takes a little longer than other times. If COP continues down, the 20 week moving average will continue to rise. They would meet around the $96-$97 range. That is where I would add to my position or buy back the shares I sold for a profit. The reason I buy there, is due to the reward to risk ratio. If I buy just above support and support doesn't hold, I'm getting the hell out of Dodge and I'm cutting my losses on the new position to a minimum. I'm also selling another 1/4 to 1/3 of my long term shares because I wouldn't want to see a drawdown of another 10 bucks before we reach the next support level. There are many ways to make money in the market and you gents have had your share of success. I'm merely sharing a strategy that has worked for me. dabum