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

To: Robert Graham who wrote (4676)	1/8/1998 10:22:00 PM
From: Chris	Respond to of 42787

agree bob g. the 50 day ma resistance is a common feature. one great example is this: Microsoft.. look at the chart for the last 2 months.. cbs.marketwatch.com msft with legal battles has tanked from 145 - 120 (yikes) ok.. we we see a bottom fish play ( i know steve loves em) and let's say we buy at the bottom.. my inclination would be to watch for the 50 day simple moving average as the next resistance point... look what happens. msft zooms from 120 and notice where the highs are for the last 2-3 trading sessions. the highs are TOUCHing the 50 day sma from the underside.. it doesn't have power to break that 50 day sma as you mentioned, ob/os is a GREAT tool to use to see if it has enough power. as soon as my short-term are ob, and it's attempting to hit 50 day ma... you know chances are it's not going to make it here is another example of a succesfful break of 50 day sma but a failed rally: pull up SUNW chart and look at 12/1/97. you notice that sunw did break above the 50 day sma even though it was ob at the breakout date. however, notice that it quickly reversed itself and broke BELOW the 50 day ma (automatic sell) 3 days later.. hopefully, if you were keen, you would know that sunw was failing to stay above the 50 day ma and sell at the peak of the top. ======================= check this one also: same SUNW chart but note: 12/19/97 notice that SUNW broke above the 50 day ma.. and kept on chugging on.. that shows POWER.. notice where your stochrsi 8,5 are.. they are low and still have a lot of up room left.. you know for sure that it will stay above 50 sma ======================= strategies: how can you take advantage? well. let's say msft example. you are at 120 and you know the 50 day resistance is at 133 (let's say).. i would then put a sell limit order at 133.. thus you will sell out at the top at the point of resistance.. boom. you actually sold out at the top! now, additionally, i would have setup a buy stop order at 133.25-133.50 to catch any breakout above the 50 day ma that way, im protected! if it fails to break 50 day ma, i am out and sold at top of the rally however, if msft surprises me and breaks above the 50 day ma and keeps chugging along,, then my buy stop above 133 will catch msft on the breakout.. these are tricks to help you "reduce your emotions"... everything is in place and you sit back let it happen... no need to scramble and punch trade buttons.. you have the orders set and just let it happen.. all stocks will go up or down.. 2 directions.. you just plan what to do for each scenario.. hope it helps.. wow. that was a long post <g> Chris