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.

Gold/Mining/Energy : Trump's 12 Diamond Picks, Discussions Limited -- Ignore unavailable to you. Want to Upgrade?

To: bill who wrote (982)	6/27/1998 10:23:00 PM
From: George J. Tromp	Read Replies (1) \| Respond to of 2251

Bill I am sitting here on a Saturday night., so here is my take on bollinger bands. For those technicians., or others Bollinger bands were developed by John Bollinger. Bollinger bands are really a modification of trading bands developed by John Bollinger. Normally trading bands are lines drawn at fixed intervals around a moving average. Trading bands are called moving average envelopes. However there were problems in these trading bands. First different trading situations require different widths., and second different moving average lengths produce different trading bands. John Bollinger out of California solved the problem by placing the bands two standard deviations on either side of the moving average. Because of this fact., Bollinger bands will vary in distance from the average as a function of the stocks volatility. John Bollinger interpretation is as follows for a general guideline: 1. Sharp moves tend to occur after the bands tighten to the average., the volatility lessens. 2. A move outside of the bands calls for a continuation of the trend. 3. Tops and bottoms made outside the bands., which are followed by tops and bottoms made inside the bands., indicate a trend reversal. 4. A move originating at one band tends to go to the other band. So volatility being a function of this indicator indicates that as bands tighten volatility lessens., as bands expand volatility increases. In some case you may have heard the phrase" Riding the Band"., well usually a breakout above the band will see price action ride the band., which can be a function of volume., that is price movement riding the crest of the bollinger band. So traders look for penetration of the bollinger band., riding the band upward as well as downward., seeing volatility is a function of price movement. There are variations these being general interpretations. Bollinger Bands have been a very effective tool especially on the higher priced stocks., usually breakouts occurr with the stock gapping up., and and expansion of the bands. Momentum., OBV., Schochastics as well are useful indicators for trading parameters. Another useful tool being Candlestick charting., somewhat more complicated but an interesting study in itself. Most technical analysis is more predictable on the higher price stocks., it has worked very well., in predicting significant moves in Aber sometime back. Sincerely George J. Tromp

To: bill who wrote (982)	6/28/1998 4:17:00 PM
From: Mark Bartlett	Read Replies (1) \| Respond to of 2251

Bill, While TA can be helpful, in the case of WSP, news will drive the price .... either up or down. You can pretty much throw the TA out the window,for the time being at any rate. IMO I would be focused on the simplest of indicators - price and volume. Mb

To: bill who wrote (982)	6/28/1998 9:21:00 PM
From: Mikey	Read Replies (2) \| Respond to of 2251

Bill, I totally disagree with Fix and Bartlett. TA is exceptionally useful. It told me that WSP was making a large descending triangle last year with a horizontal bottom around 1.16-1.20, and that when it broke that it would get to around 0.65, so I sold as soon as it broke 1.16 and saved myself from a 50% loss. The rally last winter was simply a bear-market rally back up to the lower boundary of the triangle. I believe that the recent action is the start of a new cycle. How high it will go, I have no idea. Don't let people who don't use TA discourage you from using it as a learning and trading tool, particularly in penny stocks. Fix and I have had this discussion before, we have a difference of opinion on the topic, too bad for Fix. I skipped over most of your post, but one thing I use on momentum stocks is a combination of Bollinger bands with RSI...if the price touches the top Bollinger band AND the RSI gets to the upper limit (most people say 80) then that's a pretty good sell indicator. It might not get you out at the very top, but it is a lot better than a lagging indicator like a moving average, which gets you out long after the top. The RSI upper limit varies from stock to stock. I find it can range from 70-80, you just have to look at the individual stock to see how it has performed in the past. I use a 30-day moving average for my Bollinger bands, with standard deviation of 2. You can do a lot of tweaking for each individual stock; top RSI 72 with 28-day, 2 std. dev. Bollinger band, compared to RSI 72 with 30-day 2 sd BB, compared to RSI 70 30-day MA 2 sd BB, etc etc til you find out the best combo for a stock. I don't have that applied to WSP, mostly use it to find exit points for my long calls in Nasdaq issues. In WSP I mostly look for chart patterns (triangles, trendlines, etc). I'm not selling anything yet, I just added to my position on the breakout last week. M.