Forum Archive Index - June 2002

[Phaedrus <Phaedrus@techemail.com>]

Brian,
       It is good to see you posting charts. Well done. To answer your 
questions :-

(1) "Is it a fluke that the price broke through long-term downtrend at the same 
price where the short-term uptrend was confirmed with a higher low on June 5 at 
$2.86?" 
  Yes. It is mere happenstance, a curiosity that means nothing, in my opinion. 
Others may imbue this fact with cosmic significance!

(2) "From a long-term perspective should I wait until the price breaks strong 
(psychological) resistence at $2.99 or is the trend confirmation at $2.86 
enough?" 
  The earlier you buy, the lower the price you will pay, and the higher the 
risk you run. It is all a tradeoff of risk versus reward. The logical entry 
points that I see are, in order :-
(1) On the trendline break at 286.
(2) After the confirmation of the new short-term trendline at about 291.
(3) On any Close above 299 resistance as you mentioned.
(4) On confirmation of a new longterm uptrend (Any Close above 320.)
 Your suggestion (3) is quite a good one, logical, and a reasonable compromise.
 
(3) "Which do you consider a more relevent indicator, the short-term uptrend 
breaking through resistance level of $2.99 or a further higher low on the 
long-term uptrend line?"
  Depends on your timeframe. Short-term, the breaking of resistance at 299 
would be more relevant. Long-term, a higher low, confirming the current 
tentative trendline would be more relevant. These things are really a matter of 
opinion, though. Different people have different priorities and value 
judgements. 

 What you really want here is confirmation of a new long-term uptrend. That 
will come on any Close above 320. This would give a higher high after a higher 
low = Uptrend. The most risk-averse would wait for this confirmation before 
investing.

    Regards,
               Phaedrus.

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