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Strategies & Market Trends : Point and Figure Charting -- Ignore unavailable to you. Want to Upgrade?

To: studdog who wrote (6705)	9/2/1998 9:29:00 PM
From: Dennis J.	Respond to of 34824

When to sell/buy below 200-day ma's? There are probably some good reasons to buy stocks which are below their 200-day ma's, but they are likely related to new information, or another fundamental/structural change (key new employee, FDA approval, major financing, new product announcement, etc.). Lacking something like this, be very careful when bottom fishing. Remember, when you are buying, others who may have held a long time or who may know more than you are abandoning ship. If you must bottom fish, try this. I scan daily charts of my stocks, each having 4,9 and 18-day moving averages. This gives a view of the short-term situation. I also look at weekly plots to get a longer term view (an 18-week ma is close to a 100-day ma). With ma's, watch closely for crossovers of two or more ma's. If a stock drops thru several ma's, the short-term ma will likely cross over the intermediate-term ma, and so on. When ma's cross each other in such fashion, then tend to stay in the new relationship for quite a while, and stocks can continue the new trend for months. Ditto for up-moves or down moves. Sometimes p&f will give warnings at the same time, sometimes not (high pole tops, for example). Perhaps it would be good to choose some stocks with interesting p&f charts, then look at daily plots with ms's. It will likely add to your "feel" for the situation. Hope this helps. More later, Dennis