Forum Archive Index - March 2004

[Phaedrus <Phaedrus@techemail.com>]

Allan,
      You are showing an unhealthy interest in TA. What's worse is that with 
nothing more than a crude cocktail napkin based methodology you have learned to 
identify trends. Where will this end?
 As you rightly surmise, a close of above $1.25 will mark the beginning of an 
uptrend for RBD. Price action broke above a confirmed longterm trendline today, 
and I have referred to the price/volume climax of 26/11/03 in previous posts. 
As I am sure you know, these commonly mark major turning points.
 The chart below also shows a longterm triangular moving average. A triangular 
moving average is similar to other moving averages except a different weighting 
scheme is used. Exponential and weighted moving averages assign the majority of 
the weight to the most recent data. Simple moving averages assign the weight 
equally across all the data. With a triangular moving average, the majority of 
the weight is assigned to the middle portion of the data. It is simply a 
double-smoothed simple moving average. This means that it gives a very smooth 
curve relatively unaffected by the "noise" of price fluctuation volatility. 
Such an indicator is well suited to longterm investors wanting to participate 
in the major part of of a trend without running too much risk of being flicked 
out prematurely (or tricked into buying) by transient price spikes. This or any 
similar long-term moving average enabled users to ride the 18 month uptrend and 
lock in profits, while then keeping them out of this stock as its value more 
than halved over the next 18 months. Todays close gave a crossover on this 
indicator.
 So, have we turned the corner on RBD? Based on the price/volume climax, the 
rebound from long-term support, the break of a long-term moving average and a 
trendline break, it certainly looks like it, though we need an uptrend - a 
close above the previous peak and resistance at $1.25 - as confirmation.
                           Phaedrus.

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