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

To: Ms. X who wrote (8953)	10/23/1998 9:01:00 AM
From: Ms. X	Respond to of 34809

Interpreting a chart: SANM I had someone ask me in pmessage when was the best time to enter SANM. It's hard to discuss these things without visuals. This will give an insight on how to interpret a chart. First thing I know is the NYSE BP is in Bull Confirmed as well as the Optional Bullish percent and the sector (Semi's). All great levels. I also know the RS just reversed to X's which is good. Now, I look at the chart. Absolutely the first thing I look for is the trend line. For those just learning, the trend line is either the bearish resistance line brl(moving downward) or the bullish support line BSL (moving upward). Those above the BSL are trading above the trend line those below the brl are trading below the trend line. Above bullish, below, bearish. In the case of SANM we have a brl which means it broke through major support at some point and the BSL. Once that happens a brl is created. Now, I have said many times if the market is in good shape and the RS is positive as well as the sector, you can take a little risk on the chart. Bottom fishing (bounce off oversold bottom levels - below brl) etc and have a good stop in place. I wouldn't recommend that on SANM and I'll point out why. 47 X X * 46 X X O X O X * 45 --------X O X O X O X --X O * <--Bearish resitance Line brl. 44 X 7 O X O O X O X O * 43 X O X O 8 X O X O X * 42 X O X O X O X O X O * 41 X O O X O O X O * 40 - ------X ------------O ------O X O ------* ----------- 39 O X O O * 38 O X X O X * 37 O X O X O X O * 36 O X O X SANM rallied right to the brl here-->X * 35 O X O --------------------------O X O --------X O <--It bounced off 34 O This action makes me wonder O X O the brl and headed 33 if it can get through the brl * O X O down again here 32 Broke the BSL---> O X 31 * O X X 30 Bullish Support Line BSL-->-* ------O X --X O X ----- 29 * O X O X O X 28 * O X O X O X 27 * 9 X O X O X 26 * O X O A X 25 ------------------* ----------------O X ----O X ----- 24 * O X O 23 * O X 22 * O X 21 * O X 20 - --------* --------------------------O --------------- 19.5 * Here you see a clear break of the brl and a double top indicating it can break through major resistance.Once could buy there and use the new bottom stop of 32. Much better risk reward than trying to catch it moving down to 31 with your next stop at 23. 47 X X * 46 X X O X O X * 45 --------X O X O X O X --X O * <--Bearish resistance Line brl. 44 X 7 O X O O X O X O * 43 X O X O 8 X O X O X * 42 X O X O X O X O X O * 41 X O O X O O X O * 40 - ------X ------------O ------O X O ------* ----------- 39 O X O O * 38 O X X O X * 37 O X O X O X O * ? <--This would be 36 O X O X SANM rallied right to the brl here-->X * ? the action point 35 O X O --------------------------O X O --------X O ? to initiate new 34 O O O X O ? positions. 33 * O X O 32 Broke the BSL---> O X 31 * O X X 30 Bullish Support Line BSL-->-* ------O X --X O X ----- 29 * O X O X O X 28 * O X O X O X 27 * 9 X O X O X 26 * O X O A X 25 ------------------* ----------------O X ----O X ----- 24 * O X O 23 * O X 22 * O X 21 * O X 20 - --------* --------------------------O --------------- So, what if you don't wait? It may still be fine but it could continue to bounce below that brl.