Forum Archive Index - May 2002

[Phaedrus <Phaedrus@techemail.com>]

 Try viewing this problem from a different perspective. That of someone wanting 
to buy this stock. They could be buying because of favourable fundamental 
analysis, or because they have noticed the bullish falling wedge formation, or 
because they are simply following Gerry's tips. Whatever they may be, the 
reasons are irrelevant. These people all want to buy at the lowest price 
possible. We can see from the chart that prices were in a secondary downtrend, 
steadily falling from a peak of 68 cents. Nick would have us believe that this 
was not a "real" downtrend, not a "real" falling wedge, but was "rather, a 
normal response to a flood of cheap shares entering the market". Fact is, the 
price was falling, whatever the reason(s) and the longer you delayed, the 
cheaper they got. So, when to buy? Obvious - when they stop falling and start 
rising. When they break above the trendline, breaking out of the falling wedge 
formation. This occured on 15/5, giving an entry at 58 cents.

 It seems to me that the root cause of this wrangle is that some of you want 
the price chart to reflect the underlying "worth" of the stock. It does not do 
this, cannot do it. What it does is of much more use. It shows us the true 
current market value of the stock at any time - what you would get if you sold, 
what it would cost you to buy. Reality. 

 The Falling Wedge formation shown by this stock has been described by others 
here and elsewhere as a Pennant. It is not.
 According to Murphy "The pennant is a relatively short term pattern, and 
should be completed within one to three weeks". Or Bulkowski "Flags and 
pennants are short, from a few days to 3 weeks."
 Murphy states that "Falling Wedges usually last one to three months", 
Bulkowski "A Falling Wedge has a minimum duration of three weeks. Formations 
rarely exceed four months long."
 With a duration of 2.5 months, this was a classical Falling Wedge formation.

                 Phaedrus.

_____________________________________________________________
Are you a Techie? Get Your Free Tech Email Address Now! Visit 
http://www.TechEmail.com

_____________________________________________________________
Promote your group and strengthen ties to your members with email@yourgroup.org 
by Everyone.net  http://www.everyone.net/?btn=tag

----------------------------------------------------------------------------
To remove yourself from this list, please use the form at
http://www.sharechat.co.nz/chat/forum/