Quote:
|
Originally Posted by scholes MP,
Thanks for the freebie file....great explanation in layman terms...one question for you:
If you have a stock that has a uptrending 1 year LRC and the 6 mth and 3 mth are downtrending (conflicting), which timeframe do you view as being more important?
Basically, what are your thoughts when you see this?
Thanks
scholes |
====================================
well, almost a year since you posted this and i finally saw it.
understand that the LRC shows the "historical" support and resistance for the TIME PERIOD YOU ARE LOOKING AT. when looking at a one year chart, the lrc might be ina downtrend, but within that downtrend will be rallies and up and down moves by the stock. going to a shorter time period will show these cycles up closer, so you might have a short term uptrend CONTAINED within a major downtrend, or the other way around !
in other words, a divergence is not as important as WHERE the pps is on the long term chart.
i always look at the longer term first, to see if the stock is approaching the top LRC (which means either a reversal or a breakout), and then move in closer for more detail and to see just what the stock is doing short term. The long term LRC may show the stock is declining at the moment, which will be shown as a downtrend in the short term LRC, but only reflects what the stock has done IN THE SHORT TERM !
If the short term chart shows me that the stock can move up WITHIN ITS SHORT TERM CHANNEL, and the long term chart shows me room to go before the stock will hit its TOP LRC, then i consider the stock as a strong possibility for a rally, at the least !
hope that helps
mp