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

To: TradeOfTheDay who wrote (10026)	11/22/1998 12:56:00 PM
From: wizzards wine	Read Replies (2) \| Respond to of 34809

Morning Bev in Texas :-) VISX is RS in O's at 7.16 and 7.5 will reverse that to x's... On this one the PO (price objective) obtained by the vertical count is 72 and the previous high is 71. The sector is at 58% and the DJIABP about the same... At this point we want to look at risk to reward ratio, OK??? With a PO of 71 and the stock currently at 65 that would be 6 points to the up side...Now look to see where your first sell signal is given, way down at 54 for a TB (triple bottom) break...That's 9 points down versas 6 points up...and RS in O's to boot...Let's look to see what it will take to reverse the RS to X's and get a 7.5... For this one to go up, the market would likely have to go up alse...so let's do a little math... Stock price $65 divided by the Dow 9200 = 7.06 68 " " 9250 = 7.35 71 " " 9300 = 7.63 reverses to X's at 7.5 Do I think this will happen, Don't know but really don't like the risk to reward ratio...I like a minimum of 2 to 1 and preferably 3 to 1 reward to risk.... Hope that helped, and as far a good entry points...The 59 or TTB signal was a good point, but I don't like stocks with RS in O's unless it's on the verge of reversing back up and has a GREAT Risk/Reward ratio... Later Preston

To: TradeOfTheDay who wrote (10026)	11/22/1998 7:25:00 PM
From: Smooth Drive	Read Replies (2) \| Respond to of 34809

Hello Bev, A slow Norwegian's clouded view -- >>What constitutes the PULLBACK?<< If you're thinking of going long, it's a reversal from a column of X's to a column of O's. If your thinking of shorting, it's a reversal from a column of O's to a column of X's. The simple 3-box reversal is a pullback. There's no specific number that must be hit to be an official pullback. >>Should it pullback to the bullish support line?<< If it does, it makes establishing your stop loss that much easier. But no, it does not need to pullback to the BSL. With extended stocks you would never get in. A random thought or two: Many words have been written about buying on a P&F pullback. If a stock is trading near its Bullish Support Line, then the pullback buy option is very clear, as is the stop loss point. But, if a stock is extended and you want to take a position, where in the pullback would you do that? 3 boxes? 5 boxes? A trend line? I never think about that anymore, because (after a couple of burns) I never purchase a stock on a pullback. Hello -- it's going the wrong way. I don't know where in the world it's going to stop -- no one does. I purchase on a positive reversal after the pullback. One can use a buy stop order or simply wait for the positive reversal and then purchase. (All this assumes a market down approach: Market, sector, relative strength, price objective, risk/reward, a couple MACD'S, putting on the old unwashed socks, taking a swipe at the cat, etc, etc.) Take care, Eric