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Microcap & Penny Stocks : TSIS: WHAT IS GOING ON? -- Ignore unavailable to you. Want to Upgrade?

To: francis terry who wrote (5579)	3/23/1999 3:17:00 PM
From: John S. Baker	Read Replies (1) \| Respond to of 6931

OFF TOPIC -- No offense taken. My primary (highly preferred by me) method of estimating support and resistance levels is to look at the prices at which actual transactions have occurred. Some people like to use Point and Figure charts to do this or any of several mixes of moving averages. I prefer to try to factor in the actual quantity of transactions and use a graph of "Volume by price", which depicts the volume of actual trades which occurred at each price level during the time period being studied. The theory is that if a lot of people have bought a lot of shares at a given price, they are likely to consider themselves "under water" until the price returns to that level. There will be some reluctance to sell until they can get their money back. Just the opposite occurs when the price is above the point at which most people bought, creating support levels. The challenge is to determine the "most appropriate" time frame to examine. I usually start with a default of 12 months, unless I know something significant has changed within the company. Here, courtesy of www.bigcharts.com, is a commercially available depiction of Volume by Price over the past year. 206.146.143.80 Notice the significant proportion of sales (weighted by volume) which occurred at prices in the 50-55 cent range. I interpret this as a resistance level ... a price at which a lot of people will be more willing to sell their shares, considering themselves lucky to get out in one piece. There is a benefit in this process also ... because each of these sales will be to a new holder who now has a higher "tolerance level", which then hopefully becomes a support level in the future. If you prefer to look at a 2-year chart, a similar pattern exists, but showing a overhang in the area of (perhaps) 45-60 cents. 206.146.143.80 Happy Due Diligence. JSb.