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Guy,
That is an interesting chart and shows the basic problem with using
Raff regression channels. That is, where to start and stop the channel.
That's why I like to switch to a Trader Vic (TV) type channels as soon as
possible. If APM runs to a new high, then a TV chart would be very close
to the slope of you dark blue lines. The longer the time frame a Raff
regression chart covers, the more it tends to have the same slope as a TV
type chart. For that reason, I'd use the dark blue line channel. Of
course, that may just be wishful thinking on my part since I do have a
position in APM <G>.
Jim
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From: Guy Gordon <gordon@xxxxxxxxxxx>
To: metastock-list@xxxxxxxxxxxxx
Subject: APM Raff channels
Date: Tuesday, August 26, 1997 4:08 AM
Here's an interesting chart: http://www.white-crane.com/apm.htm
Applied Magnetics makes thin-film and magneto-resistive heads for disk
drive makers.
My problem on this chart is that I can draw TWO perfectly good Raff
Regression channels on APM. Which one is the price really on?
The first channel is from 6/26/97 to 8/19/97, and then extended right.
Parallel to this channel I generate a trendline using a Linear
Regression line on the 26-day Moving Average, from 7/10/97 thru
8/19/97. All these lines are dark blue on the chart above. APM has
just tested the trendline twice.
On a shorter term basis, I draw a light-blue Raff channel on APM from
7/15/97 thru 8/25/97, and extend it right. APM is in the middle of
this channel. This channel is not yet verified by my 26-day average,
though in the last week you can see just a hint that the average is
turning to run parallel to it.
My question is: Short of waiting for one of these channels to be
violated, are there any good indications of which one the stock will
take?
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