To: Haim R. Branisteanu who wrote (2686 ) 7/22/1998 10:01:00 PM From: Paul V. Read Replies (1) | Respond to of 5232
Haim, Glad to see you back on the site. Thought we had lost you with all of your humor.<G> Thought you might be interested in the analysis of a post from the point and figure charting SI site regarding CA. Paul V. Duke60, from Point and Figure Charting, SI, made the following point from my inquiry. I agree with his interpretation. Thought you would be interested. Any thoughts? Paul > To: Paul V. (4993 ) > From: duke60 > Wednesday, Jul 22 1998 7:08PM ET > Reply # of 5047 > > Hi Paul <CA>. This was a rare case where we did not get at least one P&F sell signal before > the carnage. IMHO, the value of P&F is that you see the smart money getting out before the > big drop. > I have an on-again, off-again study where I go to the library to research the old Investor > Business Dailies, looking for stocks that pounded 20% or more over a very short period of > time. From this list of stocks, I throw out all stocks that are not Value 1 or 2, or not above > their Bullish Support Lines (BSL) or not having an RS in a column of X's. This eliminates > 90% of the stocks. So far (over 18 months or so), every single stock that had RS in a > column of X's, VL 1 or 2 and above it's BSL gave at least one sell signal before the damage > was done. There is an old post where Tom Dorsey, posting through Jan, gave an example of > how DURA, a strong stock, gave several P&F sell signals before it dove. Wish I could find > it. > My point is, that in the vast majority of cases a solid stock will give several P&F signs of > weakness before it gets killed. CA was obviously the exception. IMO it was the exception > because the insiders were also caught by surprise and therefore their sales did not come > early enough to tip off the chartsters. I know that there was insider selling last month, but > no more than normal. > Stick to 1) good fundamentals, 2) above the BSL and 3) RS in a column of X's and you will > probably have plenty of warning before a stock tanks. CA was the exception. > > duke60