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

To: Jerry Olson who wrote (9241)	11/3/1998 6:14:00 AM
From: Bwe	Read Replies (3) \| Respond to of 34820

Good morning, Jerry. CDWC has the Pole portion of the HPT pattern having run up 33 straight boxes on it's chart, however, the stock has to retreat to $60 to fulfill the requirements for a High Pole Top. The key word in the pattern is "Top" as I'll describe in a moment Traders will sell the first 3 box reversal off the top of a stock that has run up 20 or more boxes, so the reversal to $74 from $77 was a "Blumenthal 20 Box Sell Signal". If CDWC is to remain healthy on it's chart, it'll have a normal correction during this current move into a down column and will stay away from the nasty HPT at $60. A HPT pattern occurs when a stock has a good upmove and exceeds the previous column of X's by at least 3 boxes. After the stock reverses into an O column, the stock then retraces 50%+ of the column of X's. A 50% retracement is not enough Chartcraft has found, it must be at least 1 box more than 50%. So in CDWC's case, since the stock has run up 33 straight boxes, a retreat in the very next column to $60 would be a 17 box retracement. The important underlying concept is that if a stock is going to give back over 1/2 of a great up move then there must be something wrong with the supply/demand relationship for the stock. These patterns are indicative of either short or long term tops in a stock. The stance of the NYSEBP and the stock's sector BP as well as the stock's own p&f chart will determine what happens next. Chartcraft has found that HPT's lead to sell signals 80% of the time. In a market with a bullish NYSEBP, HPT's often act as warnings, not final tops. With a bearish NYSEBP, they cause devastation to a stock's p&f chart. HPT's are also early warning patterns in that they clue the chartist to the supply/demand relationship for a stock before an actual sell signal is given. HPT's are unique in that way. Best of luck to you. Bruce