Forum Archive Index - August 2000

[Brian Gale <brigale@i4free.co.nz>]

Hi Warner

I think you have hit the key - when is a trend not a trend ?

If we take TEL as an example.  Back in June, after a steep fall from a high 
of nearly $10.00 the price seemed to hit a resistance at around 7.60 and 
there was an uptrend for three days up to $8. If the ' buying on a high 
'  theory had been followed the buyer would have had to get out quickly 
because it was not a continuing trend only a spike,  and there was fall off 
to $7. Two further spikes followed again with a similar aftermath with the 
price falling away to $6.50. Now we have a rise again, the question is will 
it be the start of an upward trend or another spike. So if the theory is to 
work it obviously has to be used in conjunction with the extraneous factors 
prevailing which in the case of TEL have tended to be negative.

However if we take another example i.e. GPG the theory would have worked 
well as it was a continuing upward trend with a steep lift.  But in this 
case the extraneous factors were positive.

The difficulty, as I see it, is determining the difference between a spike 
and the start of an upward trend,
which can be just as difficult as picking a bottoming.
Regards
Brian


At 16:17 29-08-00 +1200, you wrote:

>The comment "ride the trend until it ends" seems to be as risky as try to
>pick the bottom. Sometimes knowing when to get off is harder than getting
>on!
>R
>Warner
>


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