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Gold/Mining/Energy : Sideware Systems - SYD.u/V, SDWSF -- Ignore unavailable to you. Want to Upgrade?

To: Charles Kalb who wrote (3814)	6/4/1999 4:51:00 PM
From: jocko	Respond to of 6076

Hi Charles..... Thanks for the info. I am not very astute on T/A but I am very interested in your interpretation/presentation.

To: Charles Kalb who wrote (3814)	6/5/1999 2:03:00 PM
From: Charles Kalb	Read Replies (1) \| Respond to of 6076

I was asked at the Raging Bull board for an English translation of my retracement analysis (Post #3814) so am posting translation here also. As a stock trends generally upwards in price, as SYD has been doing for a number of months, it is usual to have some resting spots along the uphill climb. The rarest behavior is for a stock to go up day after day in a straight line. Happens sometimes for extremely strong stocks, sometimes for many months, but don't count on it. A least-squares curve fit through the price data (regression line), along with a statistical measure of deviation from that line, can be used to define an error channel. Generally the price stays within that channel as it wanders upwards. The next best thing to a straight-line increasing price is for the price to move up to the upper error channel line and then move sideways until it reaches the lower error channel line, then move up to the upper line, etc. etc. Nice when you find a stock doing that because, again, the price never decreases. When such a stock does start to decline at all might be the time to sell. But in general, stocks go up and down within the error channel. The retracements I mentioned for SYD are referenced to the gain from the lowest price in the previous valley to the highest price at the last peak. The point I was making for SYD is that such retracements occurred after resistance was met at both the $1 and $2 levels and is now in another retracement after $3 resistance level. Moreover, SYD seems to like to take back a huge percentage of each gain before it resumes climbing. Buy and hold will make money under current conditions but selling at resistance levels and re-buying at support will make significantly more. I'm not talking shorting here, although we know that goes on as well. I guess I was subconsciously hoping that SYD would move horizontally just under $3 after the recent very strong move up and then resume the climb, but that didn't happen. For the current retracement I used the low of 1.00 on 4/15 and the high of 3.06 on 5/18. That is a gain of $2.06. So a 50% retracement of that gain would have the price touch $2.03 (3.06 - 1.03 = 2.03). Hope it doesn't happen. Friday's close at 2.30 is almost exactly on the Fibonacci 38.2% retracement level. A 61.8% Fib retracement, a level that was even surpassed a bit on the two prior retracements, would put the price at $1.78. I think support will come into play before that. As the price retraces, support and resistance levels will often occur at or near the Fibonacci Retracement levels. There is nothing absolutely magic about Fib numbers but they do seem to correlate with many natural phenomena. Common fractions like 1/3, 2/3, 3/4 are also used in retracement analysis.