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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank -- Ignore unavailable to you. Want to Upgrade?

To: Thomas Sterner who wrote (5690)	3/3/1998 3:09:00 PM
From: LastShadow	Respond to of 120523

Trendlines and Entries: An acquaintance who is learning to trade sent me an email, and I felt the advice I offered was worth posting. Hopefully he won't mind the anonymous repost of our correspondence. "I did all kinds of analysis, and felt very confident when I bought 100 shares of AFCI and 300 shares of CLFY. AFCI @ 31 CLFY @ 15 3/8 After the day I bought these, they have fallen on 2 consecutive days (yesterday and today). I'm worried. Did I make a mistake by not selling them when they started falling?" My reply: "Well, you bought them a little high in the intraday range, and at an 8% stop loss you would be out by now, but basically I would say as long as they stay above 28 and 14 you should be okay for a local hold. If you look at the daily chart for AFCI, you will see that connecting the lows for Mid Dec, Early Jan, Late Jan, Mid Feb and yesterday would give you the lower trendline - which says its still moving upward, although swinging a lot intraday. In those cases, the best way to enter is to extend the trendline two days and see what the minimum would be and still stay above the line. That is where you would set your limit buy - to buy higher than that would mean you risk getting in at a point that will take several days to reach. Its better to not get your order filled and wait a day than to buy early with the volume or price jump and have paid too much." ...except this version is spell-checked... lastshadow