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Strategies & Market Trends : Stock Attack -- A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Chris who wrote (4037)	12/6/1997 11:54:00 AM
From: Chris	Respond to of 42787

another post: pull up this chart and study/learn from it.. Subject: Technical Analysis - Beginners \| Previous \| ------ \| Respond \| To: K.H. Flower (7203 ) From: David Russell Coburn II Saturday, Dec 6 1997 9:31AM EST Reply # of 7204 To all, If you want to see a failed "trader" reversal look at "HAIN". On 9/19/97 it set up what alot of traders must have thought would be an intermediate term low. On 12/3/97 it opened at this price(appx) after a significant retracement. Alot of buying came in thinking the stock would reverse. It failed and closed at the open. The next two days the stock fell further. Sometimes traders will jump on stocks that are reversing at what they perceive as a major previous support after it has undergone a good run. This run went from 5 to 12.75 and has now retraced to 8.5 or so. If I were looking to buy this stock, which I am not, I would probably wait for 8 or maybe even 7. I would set a sell target of about 9.25. Have a stop about 7.5. These downside prices might never happen but if they didn't I wouldn't buy it. It would also have to reverse on really good volume 500,000 or so. I would want volume to come in for a couple of days and the price to break the top of its' downtrend channel. If it is going to be a good reversal you should see volume come in when these things all happen. I have no intention of buying this stock (HAIN) because their are way to many that are still climbing. These generally have a lower risk than those reversing. You never no when someone is going to dump but IMO as long as the trend is intact they are less likely to. On reversals remember there were people buying on the way down who are now probably scared. They may be looking to get out, especially newbies. Also, hard core traders will often take a quick profit of .25 or .5 and leave you holding the bag on a failed reversal. Some people would probably disagree with me on these statements. I don't actually look for abstract patterns like H&S or C&H but this particular chart does display what I would call a H&S top. The one pattern that I actually do look for is a rising triangle when a stock is at an intermediate or long term high. This is a pattern that consistently demostrates buying pressure. In laymans terms you could say that people are waiting to get in and are afraid it won't make it back down to the previous short term low, so they buy a little early. People aren't selling because they expect it to move higher and they're in a little profit. This pattern is especially good if it is rising to a previous hard resistance that has a gap above it. There are basically three ways to play a pattern like this. 1.Buy a little before the breakout at the bottom of the rising channel. Sell during the breakout or during the blowoff. 2.Buy immediately after breakout. Volume very important. 3.Buy or add on succesful retest of breakout point. Volume very important. Always know what your buy, sell, volume, and stop loss targets are before entering a trade. Use them. Also know what you expect the trade to do. As always there are way to many variables in what and why and where a stock moves to do any justice to actually describing it. To the arguments I have made above there could be as many made against. You cannot predict with any huge degree of confidence why a stock moves but you can trade things that have worked for you in the past. The above has worked for me. Always be ready to exit if it starts going against you or it is not doing what you expected it to do. I have learned a few things and one of them is it is much better to develop an attitude that will remove you from a trade that goes on to new highs than to gamble. What I mean is, it is better for me to take an early profit than to gamble and have more loosers or give back all my profits. Whatever you are doing, if you can say your making money consistently, then it's ok. I'm looking at charts this AM and am a little confused. Obviously we had a good week, retested a good DOW breakout, but I saw alot more breakout and reversal patterns last weekend (in the $2 - $15 range NAZ) than I am seeing this AM. Anyone seeing anything similar? Any thoughts? Who thinks we are still in a trading range on the stocks that I trade. ($2 - $15 NAZ)? David