Forum Archive Index - August 2002

[Phaedrus <Phaedrus@techemail.com>]

Andrew,
        Over the year or so that this stock has been in a steady uptrend, 
always above its trendline and always above its 120 day ema, there have been 
many Bearish RSI divergences. (I have marked only the Class A divergences on 
the chart). You could argue that each of these has marked a good short-term 
exit point, but that is not what we are looking for here. 

 Investors such as Snoopy are not interested in actively trading stocks, and so 
do not want any system that generates a lot of signals. The situation is very 
simple. Has GMF been in an uptrend? Yes. Is that uptrend continuing? Yes. 
Should Snoopy sell? No. When should he sell? When the uptrend ends. When will 
that be? No-one knows.

 If Snoopy had acted on the first Bearish RSI divergence shown on the chart, he 
would have been flicked out at just over $1.30, missing a subsequent 30% rise 
in price. 
             
                 Phaedrus.
 

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