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Strategies & Market Trends : Stochastics -- Ignore unavailable to you. Want to Upgrade?

To: Speed Racer who wrote (22)	1/22/1998 5:06:00 PM
From: Wayners	Read Replies (2) \| Respond to of 927

That's pretty good guessing 60. I was looking at the chart and it looks like about 50 to 60. Its a moving target as you get more daily data. Here's what I do, which I think is going to be beyond where you are at right now. There's these things called bollinger bands also known as volatility bands. I don't know if you have a math, engineering or statistics background. Anyways, what they do is show statistically where 90% of the price data points will fall within. Its based on a standard deviation from the mean--in this case the moving average of stocastics. The upper limit on stochastics will be limited by the upper band on stochastics. This isn't something you will be able to do in alphacharts. The next best thing is the second line of the fast/slow stochastic. Crossovers give you the buy/sell signals. I think PMSI is a good one just to paper trade to get the idea. I would recommend for real trading that you pick an actively traded stock that trades over $5, preferably over $10. Here's one you should look at that demonstrates a buying opportunity. Its SHVA, or Shiva Corporation. The 5 day stochastics are oversold at 20, its on a slight or moderate uptrend and the bollinger bands are what we call pinched right now meaning an imminent price move within the next day or so. Such imminent price moves almost always resolve themselves in the direction of the current trend--which in this case is up. Look at a chart of it and you'll see what I mean. It trades for just a little over $10. Watch it over the next few day and you'll see what I mean. There's almost free money in those hills. Good luck as always. I really enjoy helping people, and getting people to see that today's market is dominated by momentum investors that use a lot of T/A and that a lot of stock moves are more predictable than most people think. I'm not advocating that you actually buy SHVA. Just watch it for now. I think the stock market is going to have some problems over the next week using the same indicators I use on individual stocks. The trend of the Dow is down like all the other indexes and it just peaked out on stochastics at 80.