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Strategies & Market Trends : Stock Attack -- A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Chris who wrote (12235)	7/16/1998 2:47:00 PM
From: Lane	Read Replies (2) \| Respond to of 42787

chris, thanks for the dell info. What I thought to, but nice to have a confirmation. When you get a chance tonight, could you look at Monsanto...MTC. Thanks!

To: Chris who wrote (12235)	7/16/1998 3:51:00 PM
From: Robert Graham	Respond to of 42787

Yes, your observation about the gap down is significant. This will provide intraday resistance at that price level which may turn into interday resistance to further upward price movement. This gap needs to be filled today. Otherwise, I suspect it will be more likely for this stock to continue down from here. I agree that the price action of this stock is a bit unusual. Volume started out to be 100K and up to about 170K during the breakout, then tapered off to below 100K with some 60K type of days to end up in an intraday selloff yesterday with volume of 790K. The volume varies allot with this stock over a period of time. The typical volume for this stock when the stock is moving is over 100K to days with volume over 200K. I think the lack of volume on the follow through of this breakout into a steep trend along with the large and overlapping interday price bars may indicate a trader facilitated uptrend rather than bigger position money moving into the stock. This is a more thinly traded stock with some volatility that would appeal to some traders. So this uptrend itself should be suspect and as Judy states it played for the "flux" by those who are good trading during the day. I suspect the traders are providing the MM enough liquidity to facilitate the MM to move the price of the stock around, and in this case up. I have seen this happen with DELL. But I cannot be sure this is the case here without a look at a T&S history of this stock over that period of time. Furthermore, it looks like from yesterday's volume that there were position players waiting for an opportunity to get OUT of this stock. The breakout would of been a good play. But anything other opportunity to enter this trend should of only been played by a good trader that understands intraday price action of stocks well and can relate it to what they see on the charts. Discapline is the key here to a successful play. Better yet, instead of being greedy, play the interday chart. Wait for a pullback that fits with a predefined entry criteria for a method in trading stock like this that has been proven. As a technician, stick to the day chart. Like I said before, in retrospect, there was only two good possible entries visible from the chart after the breakout. The entry two days earlier on the gap up was on of the worst entries to make. However, I am sure that gap up deceived many anxious and overconfident traders to entry the stock at that time even though there was good evidence of that being an improper entry. I am sure the tape would of revealed this to be the case. I think entering the middle of a strong uptrend is tricky and needs to be approached with care and discapline. But I see people enthused by the strong uptrend and jump in on one or two "clues" that it may continue instead of looking at all that facts will which provide a basis for a more sound decision. Any given "clue" or "sign" is meaningless without understanding the context that gives meaning to it, both the context defined by the chart (up or downtrend for example) and most importantly the context of the trade (intraday or interday where intraday is used just to fine tune entries and exits). I have seen the above mistake made by beginners and experienced traders alike. This is one reason why I think this market has at times even some of the experienced traders caught up in their enthusiasm and optamistic sentiment breaking their discapline. This breaking of discapline by traders that should know better has not been an uncommon occurance for me to witness here at SI. Bob Graham

To: Chris who wrote (12235)	7/16/1998 4:08:00 PM
From: Robert Graham	Read Replies (1) \| Respond to of 42787

According to your GET then 25 should be the target point that needs to be validated on the daily chart. Then if the directional and strength type of indicators look positive, then a person can enter at this point. However, if the 25 support is invalidate, be prepared to get out quickly. The more risk tolerant traders can anticipate the validation and play in advance of the anticipated reversal. I do not recommend doing this unless the trader is familair with the intraday price action of stocks and what this tells the tape reader, and the trader has worked out a proven strategy for this type of entry. Is the 25 a fib line or better yet a confluence of fib lines? Bob Graham