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Strategies & Market Trends : LastShadow's Position Trading -- Ignore unavailable to you. Want to Upgrade?

To: Optim who wrote (711)	9/28/1998 12:35:00 PM
From: LastShadow	Respond to of 43080

Good question, Optim Although I run screens through my TA package (the one shown on home.earthlink.net is the preliminary screen) I review other stocks not in my database almost daily. The most fundamental assessment of a stock comes from looking at the daily chart. I use quote.com's with the 50 day moving average as it presents about the cleanest view (standard bar chart) for about 6 months. Any other data is pretty irrelevant for a hold of less than 3-4 months. Once I have found something that looks to have potential (I'll get to that in a minute) then I will run the TA and net to look for a minimum entry point. the minimum skill anyone needs is the ability to trendline. And that is pretty simple to do. you connect the lows on the way up, and the highs on the way down. Where they cross is the reversal point. Looking at the daily chart for ELNK we see a trendline reversal about the beginning of June when it went from about 24 up to 33 in two weeks. It then reversed for a week and the rebounded from 29 up to 46 at the end of June, and then cycled back down to 32 and up to at least 44 twice before the big dump September 2. This month it has gone from the low of 20 to the middle 40's today. Using a trendline, one would have gotten entry and exit signals at most a day late. So adding a day lag for end of day trading you would have made around 18 points less than the 58 possible for an initial buy of a stock at $28. Thats 40 points for a 28 dollar ticker making 5 buys in 4 months. As for Sectors, if you look at the other interenet stocks, you will find that they all cycled through those same high and low swings. look at YHOO daily chart, and with the exception of the first June minor reversal, it is the identical swing. now if you look at the intraday cahrt for YHOO, you see the only exit signal from trendlining (admittedly a little different for intraday charts) was the break midday Thursday. So my basic and preliminary screen is always the trendline. Then I look at the bars between reversals and see if that correlates sectorwide for other prime movers in the same group. If it does, then there is only to find out if it leads or lags the group. If it lags, then that is the one to look for entry. I'll do some more on this later. lastshadow One of the reasons I hate daytrading is that I tend ot lose that perspective on the daily charts.