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

To: Bwe who wrote (3036)5/14/1998 9:29:00 PM
From: Ms. X  Read Replies (2) | Respond to of 34811
 
Interesting stock - PXXI

Took a look at this stock today and noticed back in January it
completed a beautiful bearish signal reversal at 12. It then ran up
nicely to 20 in April. It met resistance twice at 20 and looks to be
creating another bearish signal reversal. The relative strength is in
X's and on a buy signal but the momentums have turned negative. The
monthly momentum is positive until 15.3 at which it will turn
negative. Support at 15.
The sector is in Bull Confirmed at 64%.

I'd say keep this one on the idea list to see if the bearish signal
reversal pans out and to make sure it doesn't break the bsl. I say
wait because if this isn't the start up of a bearish signal reversal,
what we have here is a stock that has created two consecutive sell
signals and lower tops. It could continue down. It is one to watch.

Here is the chart.

22 | | Top
21 | |
20 -+---------------------------------------+---------X --X ---------
19.5 | | X O X O
19.0 +---------------------------------------+---------X O X O 5 -----
18.5 | | X O X O X O
18.0 +---------------------------------------+---------X O --O X O ---
17.5 | | X X O X O
17.0 +---------------------------------------+-----X O X ----O --O ---
16.5 | X X | X O 4 O
16.0 +---------X O X O ----* ----------------+-----X O X --------O ---
15.5 | X X O X O B * | X O X
15.0 | X O ----X O X O ----X O * ------------| X --X O ---------------
14.5 | X O X O X O X X O * | X O X *
14.0 | X O X --X O X O X O X O ----* --------| 2 O X ----------* --<--Stop point
13.5 | X O X O X O O X O X O X * | X O X *
13.0 | X O X O X ----O X O --O X O ----* ----| X O X ------* ---------
12.5 | X O X A O X O X O C * | X O X *
12.0 | X O X --------O X ----O X O X O X --* | X 3 ----* -------------
11.5 | X O X O O O X O X O X * X *
11.0 | X O ----------------------O * O X O X O X --* -----------------
10.5 | X * O O X O X *
10.0 | X ----------------------* --------O --1 * ---------------------
9.5 | X * *
9.0 | X ------------------* ----------------+-----------------------



To: Bwe who wrote (3036)5/15/1998 3:09:00 AM
From: Smooth Drive  Read Replies (4) | Respond to of 34811
 
Hello Bruce,

Late night meetings. Ain't they great?

Good post! We need to do more like this. Are trend lines important or what? They are BIG!! Maybe one of the biggest. And none are easier to construct or read than trend lines on a P&F chart. I'll always be grateful to Mr. Burke and Mr. D for bringing them to my attention. Without their books I'd be trying to draw trend lines on bar charts. (Now that's an unpleasant thought.)

A trend is a trend it's your friend my friend and no one should discount the trend my friend that is my friend if you want to win, then follow the P&F trend. (What kind of crap did I just type?)

For those who don't hand chart. You're missing something that you will never get off the computer screen. I know, I know - there are those who say something to the effect that once you've hand charted, you've "been there done that" and now let the computer do its work. I say rubbish. When I have the actual chart on paper in my hand (I create the graph in Excel) and draw in all the applicable trend lines, I see things and have a much better grasp (gut feeling, intuition, etc.) than I EVER get from the cold cold screen.

That said, here's my take on your trend line discussion.

(Note: When I write a note in my journal as to why I buy or short a stock, I refer to the Bullish Support Line as BSL; the Bullish Resistance Line as BRL; the Bearish Support Line as bsl and the Bearish Resistance Line as brl. I'll do so hereinafter.)

Once the BSL is penetrated, it's yesterday's news. There's a new season and ball game in town and it's called the brl. Later, when the brl is penetrated, we got another new season and ball game. Back and forth it goes. Which BSL is the "Original"? Last year's? Five year's ago? For me, none of them. The current one is the "Original" at that moment.

Regarding X, you'll note that I mentioned it back at Message 3942467. I hand chart it and mine goes back to 91 and I'll bet yours goes back at least that far. You'll note BSL at 22 in 92; at 25 in 93, etc., etc., I know where they were, I drew them in and can see them. I also drew in BRL's, brl's and bsl's. I don't extend them out very far. When there is a change, I change. I would never consider reverting to a prior BSL as my "Official" or "Original" trend line. It would be far too confusing. I know where they were because I see where they were penetrated. And that's also where they end on my charts.

When I create a new BSL, that means a new base of accumulation was created below the brl and said line was penetrated. That's where the action is taking place right now. I can see the horizontal support and resistance locations and the trend line support and resistance locations.

It's absolutely true that an old long term trend line could come into play many years later. Cool. It just happened to be. It's an observation of the chart. But --- what's the current reading. That's far more important to me.

Have a great day Bruce.

Eric



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