Forum Archive Index - August 2002

["andrew cottingham" <arco@adinfinitum.co.nz>]

Hello Phaedrus
Yes, I actually agreed with you - the share is in an uptrend. And, I was not
suggesting Snoopy sold his shares, I was only suggesting the charting
signals as a possible warning sign.

As you have gone to a great deal of trouble charting the Class A
divergences, lets look at the whole scenario logically.
It depends on how each individual wishes to trade shares. - i.e whether one
is an investor, or a trader.
I am generally a swing trader and occasional day trader, - I buy / I sell,
based on my chart indicators.  I find it hard to sit with a share watching
the ups and downs. Selling is in my blood, and it's the way I personally
approach it, and each individual does whatever they feel comfortable with.
For me, investing is perhaps more acceptable in a confirmed bull market when
even most dogs are putting on gains.

You have charted GMF so that everyone can see that by selling on the class A
divergence, and buying back again on a reversal pattern at the low I will
get numerous bites at the cherry.
I would have sold out in Mid Feb around $1.60 and bought back in again early
March perhaps around 8% lower, and on my average of $30,000 that would make
me an extra $2500. And so that goes on swing after swing, the same applying
in July, and also on many more minor swings in between. ( Investors would
perhaps be biting their fingernails until the share got back to exactly the
same price 5 months later, lots of them selling out at that point.)
An investor buying in around March 00 and selling now would have made about
55% in 2.5 years. Using swing trading techniques and using the compounded
principle I would have made well over 3 times that. Plus I would have
received interest on the money when I was out of the stock.

It does not bother me which way people decide to trade their stocks, - good
luck to them, and if my posts are in any way helpful to anyone thats the
general idea.


Andrew

PS. GMF is not the ideal trading stock, there are many others where gains
can be made in the region of 15-50% each swing.



----- Original Message -----
From: Phaedrus <Phaedrus@techemail.com>
To: <Sharechat@sharechat.co.nz>
Sent: Monday, August 19, 2002 4:43 PM
Subject: [sharechat] GMF


> 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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