Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : RESISTANCE LEVELS- Ceilings & breakouts <30 min old -- Ignore unavailable to you. Want to Upgrade?

To: WHL who wrote (528)	11/11/1998 5:13:00 AM
From: WHL	Read Replies (1) \| Respond to of 621

To ALL- Resistance Thread Insights (and Refresher): Many stocks hit and then bounce off and stay below resistance levels that act like ceilings for the stocks for many months- sometimes for years. Interest in the stock often peaks with both high volume and rapid price movement once the stock finally is able to push through the resistance. (1) During non-market hours please tell us about stocks and their resistence levels (stocks to keep an eye on). Please make sure that the stock is trading within striking distance of the resistance and that the resistance has held on at least two prior occasions. (2) During MARKET HOURS please reserve this thread for stocks that have broken through resistence in the last thirty minutes or less. These are stocks to trade immediately. Thank you all for participating. Let's try to get the actual resistance numbers on stocks posted during non-market hours each day- even if the resistance points are 5 or 10% away. That way we can all watch to see when that level is broken. This thread is precisely about the exchange of that type of information during non-market hours. Thanks! I need to mention that we do NOT trade on news in this thread. There is a very important need to AVOID news items- since these may cause fluff and VERY short term aberations in a stock's price. This thread is really a "strong market" thread. When stocks are trending up, they tend to hit resistance levels and fall back a few times before penetrating the resistance. The stocks that we are looking for have risen to a fixed level and then dropped back from that level at least a couple of times. When they finally go through that level, they usually have a pretty good move. Low volume stocks (under 40,000 shares ADV) are too dangerous and have unpredictable gains after breakout. Probably, they are simply too easy to manipulate. Also, they are so illiquid that your buys and sells can move the market enough to erase any gains. Stocks that carry a wide spread should be avoided. The spread is often so great that it eliminates any gains. Moreover, the ask may be in record territory, while the bid hasn't even broken resistance yet. The 40K limit is for ADV- not for breakout volume. We have no limit for breakout volume- that is up to the individual investor's due diligence. The general rule is that heavy volume is required for a true breakout (at least twice ADV). (By the way I do not check this before noting that a stock has broken resistance.) The primary reason for the requirement of heavy breakout volume is to avoid being suckered by market maker manipulation. People may have differing ideas as to whether the fundamentals are in control or the MM's are- hence, this decision is left to the individual. Really high volume stocks (ADV over 1 million) tend to not have a typical breakout pattern. Perhaps these stocks have so much attention paid to them that they act differently or perhaps the size of certain trades are so large that large money managers actually dump the stock right as it goes through resistance in order to be able to unload huge positions in the stock. For whatever reason, these stocks do not follow the normal breakout pattern and should be avoided. Please limit the information on individual stocks on this thread. We all have enough problems just wading through lists of stocks with their resistance points and ADV's. The addition of news, fundamentals, comments (except chart comments) and other stuff makes the wading a lot deeper and more time consuming. Please post this other kind of stuff on the thread for the individual stock involved. Thanks. At all times please avoid touting any stocks and skip the personal discussions (try e-mail). Please try to avoid extended discussion of any type during market hours. Thanks for your consideration. Stock Charts on the Web are essential to tracking resistance and prospects for breakouts. Some of the good ones that I have found are: www1.bigcharts.com pcfn.com stocksmart.com Each site seems to have an advantage over the others in a certain area. Big charts has pretty complete information and uses interday prices (not just closing prices). PCFN is fast and if you install their special software you can see the price ranges for each day of trading. Stocksmart has coverage of some bulletin board stocks that are not found on other providers- however, their prices appear to be closing prices only - which is not as useful as interday prices for purposes of this thread. Any further helpful charting sites- please post. PLEASE BOOKMARK THIS SUBJECT ! As you know, this is done by clicking on the "Bookmark this Subject" button at the bottom of this message. After that- if you go to your SubjectMarks page during trading hours and you see a "1 new" by the RESISTANCE LEVELS- Ceilings & breakouts thread, you will know that it is time to read the thread immediately. Visit the thread and if indeed it is posted that a stock is breaking out, check the chart pattern of the stock for yourself. Then if (and only if) you are convinced that the advice is correct- get on the phone (or if you have more patience than I do, access your internet broker) and place a trade ! R = resistance ADV- average daily volume ESB = early stage breakout (<1 trading day) LSB = late stage breakout (>1 and < 2 trading days) After 2 days the stock is taken off the list.