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

To: dr. z who wrote (13523)	7/31/1998 1:57:00 PM
From: Robert Graham	Read Replies (3) \| Respond to of 42787

First, intraday support and resistance will be around the S&R your find on the daily charts. This includes 200, 50, and 20 day MAs. Next, look at a 5 day intraday chart where the last 2 are the most important. Look for price levels that indicate support and resistance to the intraday movement of the stock. Some characteristic signs is where a stock bounced at, or a price level the stock moved through with an elongated price bar. Now look back and see if you see good, repetitive evidence which forms a pattern that the price level in question was "respected" by the stock by either validating it as support or resistance, or after it has attempted to move through the price level a couple times it has finally made it, not infrequently with an elongated price bar. The earlier 3 days are just to get an idea of the trading action of the stock leading up to the present time, and to look for further evidence of the stock demonstrating a pattern of respecting the price level in question. Now if the intraday support or resistance also shows up on the daily charts also as support or resistance, then this to me validates what I am seeing on the intraday chart. Also note the volumes response to the price action against the price level. There are other price patterns to indicate the presence of an intraday support or resistance. If a stock continues to ride up against a price level and when it moves down to come back up it stops there again. In this case the price bars of the intraday chart tend to be very small where the length of the price bar actually represents the spread of the stock, where the MM is only making 1/16 and perhaps even 1/32 on the spread. Also, there are some of the classic patterns like pennants and flags that show up more frequently on the intraday charts that will indicate where good intraday resistance and support is. Some use a variation of a fib technique to come up with a couple intraday support and resistance levels for the stock given yesterdays price action on the stock. This is helpful when no nearby S&R or intraday support and resistance is to be found, like when a stock makes new highs in a strong trend up. Also indicators like the Stochs can be used even on an intraday basis to help anticipate prospective areas of temporary support and resistance. But this takes good judgement that is developed through experience. This works better for stocks that are more in a trading range style of trading pattern. Indicators like the Stochs and Bollinger Bands can also help to determine the likelihood of the stock to move through the point of support or resistance. I use this technique more on the daily charts for volatile stocks, along with the price and volume action that lead up to the stocks contact with the support or resistance and its current trend. Bob Graham