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Strategies & Market Trends : Point and Figure Charting -- Ignore unavailable to you. Want to Upgrade?

To: bobster who wrote (1356)	3/3/1998 10:16:00 AM
From: Ms. X	Respond to of 34812

Yes, Toms strategy has been to sell a stock after it reverses down after a 20 box or more run up. What he then does if the trend is still bullish is buy a call after the stock bottoms. Lets set an example. Dells high is 142 on the chart It reverses down to 130 It then reverses back up to 136. Tom would buy a call with a cost of 8 dollars. Reason is, If you were to re enter the stock, you would use 128 as your stop. So Buy a call option worth the same point amount of the stop. 144 142 X 140 X O 138 X O 136 X O X <---buy call here 134 X O X 132 X O X 130 X O 128 X <---stop limit on call. $8 call = 8pt stop loss 136-8=128) 126 X