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

To: Judy who wrote (6811)	9/5/1998 11:32:00 AM
From: Bwe	Read Replies (1) \| Respond to of 34808

Judy, I just did an analysis of Crude charts for October, November, and December 1998 delivery. Since Oil Service stocks are tied for better or worse with the commodity, I think you might find the answer your looking for within my commentary of the charts. I'll handle the p&f for SLB in a separate post. What I'm unsure of, is which of the charts, Oct., Nov., or Dec. carries more impact and has the greatest implication for the Oil Service stocks and also for the Oil group. Here's what I found: October Crude: Bearish Resistance Line (BRL - the major downtrend line from October '97 at $20.50) is at $15.20. To resume an uptrend and switch from bearish to bullish on it's p&f chart, the price of a stock or commodity must break through the BRL with a buy signal. October Crude gave a p&f buy with a Double Top buy signal at $13.60 and broke through $13.80 where the chart had topped out 3 times in August. This carries more bullish implications than the movement to $13.60. This is the closest this chart has been in a column of X's (rising prices) to the BRL since May when the chart was in a column of X's at $17.40 and the BRL was at $18.20. Being close to the BRL in May, however, did nothing to stop the commodity's decline and only an upside break will turn the chart bullish one again. The price objective for this buy signal is $14.50, so this suggests that this chart has exceeded it's upside target and it is questionable if this current move is enough to carry the commodity above the BRL. The chart is in a column of X's at $14.90. Since p&f charts only move in one direction per day, the October crude contract hit a high of $14.90 on Friday but closed at $14.59. This will cause the chart to reverse on Tuesday unless the October contract can get to $15 or higher. Next sell at $13.20 November Crude: BRL from 10/97 at $20.40 now at $15.50. Needs to break this downtrend line with a buy to turn the chart bullish Triple Top buy signal at $14.20 with a price objective of $18.70. The price objective on this chart suggests that a break of the BRL is a strong possibility. Next sell on the chart is at $13.20. December Crude: BRL from November '97 at $20.20 now at $15.10. Unlike the other two charts, the December crude p&f chart has broken through it's BRL with a buy signal at $15.20. The chart shows a Double Top buy signal at $14.40 and shows that the December contract has overcome $14.40 where the chart topped out twice before in August. The price objective is $18.70. The next sell is at $13.50. The December Crude contract can now be said to have resumed an uptrend since it is the only one to have broken it's BRL. Since the chart's trend is now bullish, we can draw in a Bullish Support Line (BSL) from the low made prior to the break of the BRL. This BSL is now at $13.70. The December crude contract is now bullish. I look forward to commentary from those with experience with the commodity that will discuss the meaning behind a bullish December contract and a possibility of the November contract turning bullish if it is able to meet it's price objective. Best to all, Bruce

To: Judy who wrote (6811)	9/5/1998 12:18:00 PM
From: Bwe	Read Replies (3) \| Respond to of 34808

Schlumberger just gave a buy signal on it's p&f chart at $49 and has an upside po of $56. The reliability of buy signals and price objectives in a bear market is very questionable so it must be taken with a grain of salt. A stop would be placed at $44. Should the stock make it up another box to $51, then a reversal into a column of O's would put me on alert to watch for a HPT. Hypothetically, if the stock were to move to $52 and then reverse down, I would put a stop at $49. A HPT in this market would take SLB down to the low $40's and surely give a sell signal at $44. Lots of what ifs in this post but suffice it to say that SLB and some other stocks in the oil service group are in trading patterns. Another stock that looks tradable is FGII which is currently in a long tail down pattern that has already reversed up and is at $14 1/2. FGII hit a low of $10 1/2 and had a run of 20 straight boxes down and the first reversal up is a trading buy. Noble Drilling (NE) just gave a "low pole" buy on friday at $14. This suggest a move above a previous top which would be a move to $18 1/2. It can't be stressed strongly enough that the bear market, the bearish RS of almost all of these stocks, and the fact that they are trading below their Bearish Resistance Line calls into question any bullish pattern that emerges on their charts. Transocean Offshore (RIG) also moved into a low pole buy spot at $28 on Friday. The next double top buy is at $33. Santa Fe International (SDC) is in a long tail down pattern and in his book, Tom suggests that this pattern is more effective if the run of O's is played out over a shorter time frame. SDC has a run of 35 straight boxes down since May and reversed up at $14 1/2 for the buy signal. Global Marine (GLM) is in a low pole buy at $11 1/2. The next double top buy is at $14 and a move to $15 would clear another top at $14 1/2. The Bearish Resistance Line is at $17. Should the price of oil continue up here, these stocks could provide a trading opportunity with great potential for profits in this bear market. All IMHO. Best to all, Bruce