Fln Angl Hy Cp Discussion Threads

[smoketrader] 01/5/2002 17:25

The problem I find with RSI is it will throw you out of a trending market because it will give constant overbought signals. Nice in a trading market, rubbish in a trending one. Welles Wilder says to look out for divergences in the RSI, e.g. RSI in an uptrend, price falling.

[captain.] 01/5/2002 16:59

Cheers as you say i looked at the RSI and ROC set at 10 for ROC not once in the last year did the ROC exceed 115 even on higher settings it rarely exceeds 140, RSI (50) has only been over the 70 mark once.I`ll watch for the MACD markers as well but aren`t all these indicators lagging that steep rate of rise and RSI tell me that its in short territory soon.

ps- totally new to studying charts so all comments welcome.

[zzaxx99] 01/5/2002 15:38

Cap, can't see it myself - RSI does look it's in overbought territory, and it's a very steep rise, so some pullback likely, but volume balance is positive, MACD histogram is positive - may have some way to go yet, IMHO. Personally, I'd wait for a decline in the MACD histogram and/or RSI crossing back through the 80 line, and/or price dropping back towards/through the recent MAs.

No advice intended, but that's the way I read it.

[captain.] 01/5/2002 15:12

zzaxx99 does ABF look totally overbought and a raving short or is it just me have i got the graph the wrong way around.

[zzaxx99] 01/5/2002 14:49

One of the things that I'm looking at more & more is the concept of divergence - of volume and/or MACD histogram. If the price is going in the opposite direction to one/both of these then I start watching for a reversal. Here's an example:



This was followed by a 70 point drop in LEX - note that the signal occurred before the top and reverse.

Only recently started looking at these, so dunno how reliable they are yet

[captain.] 01/5/2002 14:36

Thats what i was after, thanks.

Could i request your chartists views on ABF.

[melfaraj] 01/5/2002 14:29

i use 14 days for rsi and fast stochastics and 19 days for slow stochastics. macdm comes preset on websites although custom made software may allow adjustments.

[captain.] 01/5/2002 14:14

Thanks melfaraj i understand the time limitations here it was more a matter of picking your finely tuned indicators ie. the one`s which in the past have confirmed your beliefs and performed accordingly thanks for your input.

[melfaraj] 01/5/2002 14:05

captain, although i do look at indicators i hardly use them in selecting stocks. this is because i veer towards momentum rather than bottom fishing in selecting a stock. when a stock has gathered momentum and rising sharply all the popular indicators cease to be of any use, except for the macdm. under such circumstances rsi, stochastics etc would show an over bought situation. you can easily loose a great deal of money following what indicators tell you in such circumstances.

if a stock is ranging, i.e. going sideways in a consolidation pattern, and you think it is about to breakout from its current range then indicators of rsi and stochastics can be used to fine tune your timing as to when to buy, i.e. at the bottom of the cycle. this way you can save your self few percntages off the purchase price.

one of the best indicators is supposed to be the macd. you can used to see where the ma's have crossed, but more importantly to find a stock's inertia. watch the histogram, the shaded area, and compare it with the price. if the price has topped up but not the histogram then that is an indicator that the stock has a greater amount of momentum at its new top relative to its previous top. can't be clearer on this in this short space and you need to read a good textbook. basically you look for divergence between the macd and the price of a stock.

by far the best too in technical analysis is the humble trendlines indicator. this becomes a powerful tool when allied to 3 moving averages of 200, 60 and 30 days. with possibly 10 days ma for very volatile stock. and if you throw in a fibonacci grid then yo've got all what you need to work out the general direction of a stock.

one of the best books on this is 'the masteer swing trader, by farley'. this is not a book for teaching the various aspect of ta. it is for the advance user. and examples and graphs abound in theis book.

[captain.] 01/5/2002 13:10

rjmahan can`t see many replies to my request(above) so theres not a great deal of difference FBB or Pbb.

[rjmahan] 01/5/2002 13:04

Man I hate the PBB - its so injust they get to leech our ideas while we cant use theirs....

[dontknowitall] 01/5/2002 12:49

Only if you pay me £5 a month for a year :)

[zzaxx99] 01/5/2002 10:31

For those of you who are on the PBB as well, there is a really excellent thread, . If you're not a PBB member, that thread is worth the price of admittance alone, IMHO.

[rjmahan] 01/5/2002 09:56

Fanta and Melfatg - MCTY has now broken the 330 barrier you both identified - I think much further to go....

P/E of 8 when most of the sector is being revised up from 10 to 15 I really do think 350 or 400 are possibilities...

[captain.] 01/5/2002 08:43

I`d love to pick them chartists brains of yours regarding the indicators you find best on a 1/6 month basis what have you found the most successful settings for RSI,MACD also do you prefer to cross reference the overlays with their individual index or the Moving averages for index.

Your advice most appreciated (competent investor but naff chartist)

Thanks for any advice (and i mean any)

[melfaraj] 01/5/2002 07:42

wholden,
- imx, is ranging building a solid base from which, if successful, it would break out. or alternatively go down.
- demg, faile to breake through decisively and now has gone below. there are a number of criteria by which a breakout is judge as to whether it is decisive or not such as percentage, time etc. another more reliable way is to wait for the stock to come down and see it rise again above the line of resistance before accepting its breakthrough. the saifer you play it the less is likely to be the upside for the investor.

[theape] 01/5/2002 07:38

I'm rarely long, but hasn't fully enjoyed the rallies of other in the sector yet.

ape

[wholden] 01/5/2002 02:32

NUM,DEMG, ULE, btw fanta, what charts are you using and which web site?
cheers wh

[fanta] 30/4/2002 23:55

balto re QXL...you'd think it was starting to look like one on an ordinary chart but the log chart say's no....



F:-}

[slicedtomato] 30/4/2002 23:54

ulvr seems to be breaking out today above 610, within a long term (2yr)uptrend. last time went up 35% from 420 to 570. Wouldnt dream of trading it myself except to go short somewhere around 650 but longer term traders might be interested if it can close above 610...

[fanta] 30/4/2002 23:47

wholden...thanks good choices especially like OKR!...cey too short a chart though for me...


rjmahan...not sure about this one, on a longer term chart it is in a trading range and this is the top....but I note the volume surge..it may fall back before trying to break 320-325p again...IMHO of course


F:-}

[rjmahan] 30/4/2002 23:14

OK back to the definite breakouts
I think MCTY classifies - reaching new highs...

[johnv] 30/4/2002 18:29

Someone have a look at plasmon (PLM) & IMX also