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

To: LWolf who wrote (2912)	5/11/1998 12:16:00 AM
From: Ms. X	Respond to of 34811

Hi Laura, RS sig is for the Relative strength signal of the stock itself. Trend is whether the stock is in a positive or negative trend. Also known as, whether it is trading above the bullish support line (+) or below the bearish resistance line (-). It can get involved when you look at the whole picture but in general: 1) You analyse your market risk. This would be the NYSE bullish percents which we have been talking about. 2) You analyse the sector risk. Is it over extended above 70% or is it in good field position below 40%? Also is the sector declining or moving up. 3) You analyse the stock. Look at the RS to see how it has been performing to the market. If the RS is + it has been performing well. If it is negative, it has been performing poorly. 4) Look at the trend chart. Is it above the bsl (bullish support line) or below the brl (bearish resistance line). When the market is in extended levels such as it it now, you might seriously consider only initiating new positions in those sectors that have good field position below 40% and whose RS is + and trading above the trend line. It would be scary to pick a riskier stock that is in sector above the 70% level, whose RS is - and who is trading below the trend line. If the market is not at extended levels, your choices broaden out because your market risk is lower. You asked if stock is more important the sector. Well, if you have the best stock in the world but the sector is declining, your stock most likely will too. Think of it as a platform. If the platform is weak, then everything on top of it can fall. Stock selection is very important and you need to consider fundamentals as well, but the sectors and market risk cannot be ignored. Especially if you are long term. For learning P&F, it is good to look at the individual stocks to familiarize yourself with the charts, RS, trend lines etc. Then you can incorporate the sectors and market charts. It all comes together. I hope this helps and it isn't too confusing. Take care, Jan I am