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Gold/Mining/Energy : T.ITE: iTech Capital (TSE) -- Ignore unavailable to you. Want to Upgrade?

To: marcos who wrote (189)	3/25/1999 2:37:00 PM
From: keith massey	Read Replies (1) \| Respond to of 5053

Filled at .68 a couple of minutes ago. I still hold firm that it is hard to do TA on low volume penny stock. About the only thing that I find works is general patterns and support and resistance levels. Taste Like Chicken (love the name) is probably basing a stop at .66 on the March/April 1998 resistance level that was recently broken in the last run up. It was definitely a powerful resistance level as shown by its stopping power in early Feb of this year. I normally like to have some room in my stops for whipsaws. I personally have a stop in at .57. To trade to .57 it would have to break two major support levels and trade below Mr. C's private placement price. If it got to .57 then I would start to worry that something has gone very wrong (e.g. the director's steal the money and move to Tibet). From a general pattern I see a few things: Although I am not the biggest fan of Elliot wave it looks like we have a classic example happening here. Between a bear and a bull market there are usually three waves seperating the two movements. These can easily be seen with peaks in Sept,Oct,Nov. The expansion cycle of a market unfolds in a pattern of five waves. A new trend begins with a few well informed or lucky traders that move the market in what will later be seen as the start of a larger move. The first leg is called wave 1. The rest of the crowd assumes the prior trend is still the dominant market direction and this causes the first correction we call wave 2. I see wave 1 as the first run-up at the end of Jan. RULE 1: Wave 2 may not break below the origin of wave 1 I see the pullback in late Feb as wave 2. As you can see from the chart it only pulled back to .56 which is far from the starting of Wave 1 at .48-.50. I bought a bunch on the first pullback as recorded in my posts. From the end of wave 2 a strong rally then develops because traders who assumed the former trend was still in force are now squeezed out and they have to unwind their positions at the same time the majority are trying to establish a position when they realize a new trend is unfolding. Everyone is entering orders on the same side of the market for one reason or another so the third wave is often very strong. I see the recent run to .80 in early March at wave three. RULE 2: Wave 3 cannot be the shortest. This rule actually leads to a common misunderstanding. Wave 3 does not have to be the longest, it just cannot be the shortest when compared to waves 1 and 5. Then there will be traders who want to take some profits and this action forms the second correction that becomes the fourth wave. Wave 3 was slightly bigger than wave 1 so this rule stands firm. So it all comes down Wave 4 which I believe we are presently in. RULE 3: Wave 4 should not have a large overlap (if any) of the termination of wave 1. I call the termination of wave 1 at around .64-.65. If it gets more than a couple pennies below this level you will see me get a little worried. The traders that missed the strong rally that developed in the third wave position have been sitting on the side-lines of the market prying for a chance to participate in the next move. So sure enough after some profit taking they step into the market and buy in unison forming a strong fifth wave up in the direction of the larger trend now in force. This means we should still be looking for a wave 5 to complete this cycle. Usually either wave 3 or 5 are the strongest. Hopefully in this case wave 5 is the strongest which means we should see at least $1 (guess). All of these waves are based on market psychology and have nothing to do with fundamentals. However there are lots of traders who only buy on elliot wave pullbacks. Advance GET is a software package developed mainly for the study of Elliot wave. Just thought I would put this down on paper for fun. One more thing. In true Elliot wave analysis each cycle of the 5 wave cycle contains 5 waves. Wouldn't it be nice if this 5 wave cycle was just the formation of the large Wave 1 and this run-up was nothing in comparison of what is to come. Of course I'm just dreaming now but I thought if we are discussing elliot waves it should be mentioned. I'll leave the other TA stuff for another post. My brain is getting sore. Best Regards KEITH