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

To: Smooth Drive who wrote (8658)	10/12/1998 4:48:00 PM
From: Bwe	Respond to of 34812

The Bearish Resistance Line (BRL) is something I've written about and discussed with you before, Big E, but tonight, I want to repost a message I wrote that combines the breaking of the BRL and a discussion of the Bull Trap pattern. TJX which is a stock I follow very carefully provides a good example of both but you are going to have to look at Chartcraft's chart to get a true picture as it differs from DWA's. Anyway, here's the post I wrote today which includes a discussion of the BRL, and that sneaky son of a gun, the Bull Trap: As I wrote on 9/28 (Bearish Resistance Line (BRL)), and again on 10/8 (Re: Bearish Resistance Line (BRL)), the BRL has been a major problem for TJX since it was drawn in after the $28 high in August. It's amazing how strong this resistance line can be and the stock has had major trouble with it from it's inception. Today's break is not time for a party just yet, however, TJX's chart is looking more bullish. At $19 1/2, TJX has given a p&f quadruple top buy signal. This simply means that three previous times, the stock has turned around and headed south after reaching $19. This time, demand overcame supply and the stock was able to reach $19 1/2 to give a buy signal. That the BRL has been broken adds to the significance of this chart action. There is something to be wary of, however. A Bull Trap pattern would form if the stock pulls back to $18 BEFORE it hits $20. A Bull Trap is a fiendish pattern that has bearish implications. The pattern is aptly named. It traps bulls who buy on the triple/quad top breakout and the break of the BRL to boot. The buy/stop orders are hit from short sellers and everyone who wants in is in. The stock then reverses course and like the rabbit who went into the trap for the carrot, the buyers of the breakout are left holding the bag and the cage has shut behind them. Bull Traps often complete the final phase of distribution and though they are subtle in their appearance, there is a greater sense of a top being put in. Please be careful buying TJX at this price level. By the way, TJX has already had a Bull Trap pattern in September at $24. The very next down column dropped the stock to $15 1/2. Bull Traps are not to be messed with. A move to $20 would be very positive and would soften the Bull Trap possibility. The stock can still pull back after moving to $20, however, an immediate pullback is more ominous. Remember though, that there are many buyers who came in at the $20 level 3 different times in September that are still looking to get out even. A good market would go a long way toward positive action for TJX's stock price. As it stands right now, support is at $17. The upper end of this new uptrend channel is the bullish resistance line at $25. Best of luck to all. Bruce

To: Smooth Drive who wrote (8658)	10/14/1998 1:37:00 AM
From: Smooth Drive	Read Replies (2) \| Respond to of 34812

CHARTN THE DOW Just updated MCD, and it looks interesting. Take a peek: 74 X * + < Bullish Res/Sup Line 73 X O X * + 72 X O X O * + 71 7 O X O * + 70 X O O * + 69 X * O + * 68 X * O + * + < Bullish Res/Sup Line 67 X O + * + 66 X O X * 65 X 8 X O + * < Bearish Res Line 64 O X O X X 63 O X O + X O + X 62 O X O + X O + X < Double Top Buy Signal 61 O O 9 X O X X 60 O X O X O X O X 59 O X O X O X O X 58 O X O O X O X 57 O X O X A 56 O O X * 55 O X * 54 O * < Bearish Sup/Res Line TOP DOWN: a) Bullish % @ 24 in Bull Confirmed; b) Restaurant Sector @14 in Bear Confirmed; c) RS +/+; d) Short term bullish (Double top buy signal on 10/8) and long term bearish (below Bearish Resistance Line (BRL)); d) Bullish price objective of 75; e) Currently touching the BRL and if it rises one more it breaks because it's on a buy signal and that will form a new Bullish Support Line under the lowest O at 54. Additionally, it's also touching a Bullish Resistance/Support Line (BR/SL) and there's old horizontal resistance as well; f) Although it didn't form a bullish triangle you can see things were being squeezed and it did break up with authority; g) Using a few of David Evans signals -- the 5 DMA is above the 13 and the 13 is just coming up to the 40. The MACD 8-17-9 and 13-26-9 recently crossed up and the 13-34-89 just crossed up late last week. MCD is one of the classic types of stock that falls in the eatem, smokem, drinkem and take drugs furem kind of defensive stock category. In good times and bad, everybody eats. Will it break out through this formidable resistance on all sides and run? Will the broad market let it? Or, will it pull back for a breather? Guess we'll see. Take care, Eric