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

To: DJB who wrote (10593)	1/15/1998 1:12:00 PM
From: Dave H	Read Replies (2) \| Respond to of 79282

Hi Dennis, Doug will be confirming the sequential for me (I just posted the dates I'm using). If there is a Sell Sequential in place, it represents, according to DeMark, a high risk buy area (or a low risk sell area). It is defined by three parts: 1) the setup, which is a sequence of at least 9 closes, where each close is higher than than the close 4 days prior. 2) an intersection, that occurs on day 8 or 9 (or later) where the close is within the trading range of 3 days prior. 3) the completion, which is a series (not necessarily consecutive) of 13 days where each day's close is greater than or equal to the high 2 days prior. As far as I can tell, MRK started the sequential on 11/14/97. Intersection occured on the 9th day of the setup (11/26/97) and 1/5/98 was the 13th day of the completion, which according to DeMark triggers a sell signal. Now, the stop loss for the sell signal would be taking the highest high recorded during the entire sequence (which would be 1/5/98), and adding to that high the entire range of that day. That works out to be 111 7/32. A close above this would indicate that a short sell should be closed, and you might even expect another strong run up by the stock. Targets: the first target for the sequential would be a line defined by Demark using the most recent buy setup (9 consecutive closes, each less than the close 4 days prior). The highest high during this setup should prove support for the following sell sequential. This level is about 101 3/4. You should expect that line to hold on a closing basis, and you can see that thus far it has. The one day MRK closed below that, the next day the open gapped back up above that line, thus not confirming the break of the line. If MRK does break down on a closing basis through this line,you could expect to hold the sell until at least a buy setup is complete. Additionally, you could expect this to reach the bottom of the sell setup, which is around 88 (the lowest low of the sell setup). So, in sum, you should be cautious at this point with MRK; I do think 101 3/4 is proving to be strong support, but also take into consideration the overall market environment, which is a bit shakey right now. However, a breakout above 111 1/4 would be bullish. -dave