To: smolejv@gmx.net who wrote (3448 ) 8/14/1998 6:29:00 PM From: MonsieurGonzo Read Replies (1) | Respond to
DJ; RE:" LOOK at the cisco and dell charts..."Berney's BigBoyz that I have not been posting reads on the TechStocks; je suis desole .I see a nerve-racking TRIANGLE... apex is ~108 , top is ~118 and bottom is ~98 , which is also the first fibonacci retracement support line, as well as the 9-month UpTrend Line support. Note how quickly it came back from that 98 level a few trading sessions back.Technical Analysis of Stock Trends , 7th Ed., Edwards & Magee, page 108 :Symmetrical Triangles smaller than its predecessor , each Minor Top failing to attain the height of the preceding rally, and each Minor Recession stopping above the level of the preceding Bottom. The result is... a sideways price area or trading range whose Top can be more or less accurately defined by a down-slanting boundary line and whose Bottom can be similarly bounded by an up-slanting line. This type of Triangle is called a Symmetrical Triangle.coiling , which makes up the price action of the Symmetrical Triangle Pattern, is going on, trading activity [volume] exhibits a diminishing trend... The converging upper and lower boundary lines come together somewhere out to the right (the future in the time sense) of the chart, at the apex of our Triangle. As [closing] prices work their way along in narrower and narrower fluctuations toward the apex, volume ebbs to an abnormally low daily turnover. Then, if we are dealing with a typical example, comes the action which first suggests the name "Coil ".leap away in a strong move which tends to approximate in extent the up or down move which preceded the Triangle formation .Some Cautions About Symmetrical Triangles farther out into the apex of the Triangle, prices push without bursting its boundaries, the less force or power the coil pattern seems to have. Instead of building up more pressure, it begins to lose its efficacy after a certain stage. The best moves Up or Down seem to ensue when prices breakout decisively at a point somewhere between half and three-quarters of the distance from the base (left-hand end) to the apex. If prices continue to move "sideways" in narrower and narrower fluctuations from day to day after the three-quarter mark is passed, they are quite apt to keep right on the apex and beyond, in a dull drift or ripple which leaves the chart analyst completely at sea.Symmetrical Triangles .Long Straddle Long 110C + Long 110Pdelta neutral spread; the trader play.Short Strangle Short 120C + Short 100Pdelta neutral spread; the house play.plus option receipts or below 100 less that amount. Potential loss is open-ended : it got its name during the April 1978 IBM price swings, when a number of good traders holding this position were wiped out.
