Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : TATRADER GIZZARD STUDY--Stocks 12.00 or Less..... -- Ignore unavailable to you. Want to Upgrade?

To: TATRADER who wrote (868)	6/14/1998 11:39:00 AM
From: Raymond James Norris	Read Replies (3) \| Respond to of 59879

....I measure the ascending triangle at 3.75(neckline) by 3.25...Giving a target of 4.25 on the pop.... Okay, I see the ascending triangle starting back in mid April on the breakout above 3. The stock quickly touched 4 1/4 or so. Then the bears took over and brought the stock down as far as 3. The Bulls showed their strength and pushed it back up to 4 1/4. The bears this time could only manage to bring the stock down to 3.50 where a small basing occurred. Since then, the stock is rising again (on heavier volume than was in the base) and making its way back up to 4.25. The weakness of the bears is evident since they can only bring it so far down each time. The constant height the Bulls continue to bring the stock to is between 4 and 4.25. A breakout from here gives me a target of 5 1/8 ((4.25 - 3.125) + 4). The safest thing to do would be to play it as you suggested: watching for 4 5/16 on good volume. I'm a bit more risk oriented and just want to see a continuation of volume coming in and a rise above 4. The 50 DMA will cause something to give. It has provided good support and should continue to do so. That's why I would sell if it were broken. However, I think a better pattern that can be seen here is a rectangle...The top of the rectangle is at 4.25(my resistance area) and the bottom of the rectangle at 3.25... I disagree. The Darvas Box characterizes bulls and bears of equal strength. While it is clear the Bulls have not lost strength, the lows being put in by the bears continues to rise from 3.125 to 3.50 and possibly one more touch of 3.75. I say there is a possibility for a touch of 3.75 because currently the stock is about 1/2 through the triangle by my calculations. Breaks from these ascending triangles usually occurs about 2/3 way through. Therefore I think it possible the stock touches off 4.25 and then back down to 3.75 before the complete breakout. The 50 DMA should be at that price by then as well. Further, the MACD Histogram and Pring KST crossed the zero line on Friday..RS is still fine at 64, after recently moving above 50, ..Smoothed rate of change halted its downward descent on Friday.. I have MACD showing a bullish crossover on Friday as well as the Histogram convergence. The RSi value is not as important as the RSi trend. If you look at a graph of the RSi going back as far as March when the uptrend began, you'll notice a critical value of around 57. When the trend began, 57 was a value where the RSi found support. The RSi broke through 57 after Mid May when a small basing was occurring (the ascending triangle). The RSI then attempted to break back above 57. Twice it found resistance. On Friday, a clean break above 57 was made. It's common that the RSI breaks out before the stock does and breaks down before the stock does. Therefore, the RSI acts as confirming indicator to the MACD crossover as well as the Histogram turn up. I see the ADX has been in a downtrend since early May. This last week, it began turning upwards with +DMI on top. This indicates a strengthening trend and a possible break upwards since the +DMI is on top of the -DMI. Good luck, some may argue that your simple stochastic is saying you are overbought..It is giving a reading of 90... The Stochastics won't have much significance in a trending stock. Short term it will tell us if the small basing that does occur between the intervals of the uptrend is showing bearish or bullish sentiment. What's important right now is it indicates bullish sentiment. While it may be close to becoming overbought, one would expect that reading on a breakout of the pattern. Stochastics read "overbought" all the time in an uptrending stock and "oversold" in a downtrending stock. As far as overhead is concerned, I don't give that information out to anyone...It is my bread and butter at making money in the market... The only other thing of importance then is an indicator I use called the IanHighJump Indicator. I won't give you its calculations since it is my bread and butter for making money but I will tell you this: The IanHighJump has been in a downtrend since the first time HDIE touched 4.25. It recently broke out of that downtrend. Further, the indicator was basing between .72 and .40 similar to the RSI. It also broke out of this range last week. My prediction is that this stock makes an attempt to take out 4.25 and fails My prediction is this: The stock will retest 4.25. I'm not so sure it will fail the first time but if it does, I would expect a retest of 3.75 and then the breakout. I'm so bullish on this stock because I cannot find a conflicting signal (divergence) yet to make me cautious. But tomorrow is another day........ Conservatively Yours, Raymond J. Norris