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Strategies & Market Trends : Fidelity Select Sector funds -- Ignore unavailable to you. Want to Upgrade?

To: Dennis who wrote (1244)	11/23/1998 6:10:00 PM
From: Carolyn S.	Read Replies (1) \| Respond to of 4916

I'm sure Jim and Julius will give you a better answer, but I can tell you one problem with doing TA on sector funds is lack of volume information. I would like to somehow put together a list of closed-end funds and indexes that correlate highly with Fidelity's sector funds. They would have price AND volume. This would allow more TA indicators to be used. I already follow a couple of closed-ends. I'm holding FF (regional banks) which really popped today. And looking hard at TRF (Russia). Carolyn S.

To: Dennis who wrote (1244)	11/23/1998 6:19:00 PM
From: Jim Battaglia	Read Replies (2) \| Respond to of 4916

"will traditional TA work on select funds??" Yes of course they will but we need to understand some specific rules: Technical Analysis (TA) works better with funds than it does with stocks because of the time lag factor. The fund does not jump up and down thus avoid whipsaws like stocks tend to do. Because of its diversification it will be a smoother transitional change. You can see this with your computer. A computer can help you track and analyse more markets in depths. A computer allows you to use more indicators and spot more opportunities in the markets. The computer was made for (TA). There are three major groups of indicators: But rememeber indicators can often contradict one another. Some of them work best in trending markets, others in flat markets. Some are good at catching turning points. Most people look for a single indicator--"a silver bullet" to kill the confusion in the markets. There are draw backs with that however. A serious trader needs to know which indicators work best under different conditions. Before you use any indicator, you must understand what it measures and how it works. This will give you confidence in the signals. There are trend following indicators, Oscillators and then Sentiment indicators. The moving averages serve as support and resistance zones. A rising MA tends to serve as a floor below prices, and a falling MA serves as a ceiling above them. That is why it pays to buy near a rising MA and sell short near a falling MA. In INVEST-N-BEST, we use both Trend following and Oscillators with Select funds and the total world wide list of funds. I personally like Relative Strength also in deternming the proper fund to choose. Bottom Line: Yes TA works!!! For some initial further reading on TA and charting with a computer, read "Trading for a Living" by Elder. Another book entitled "Demystifying Wall Street" by Sanstrom is a excellent book on TA. Jim