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I agree. I have found that in most cases, when using Bollinger band for
instance, when the middle band is still aiming down and the stock starts
rising, it will usually hit the center line and drop down again to the lower
band. Then it is often safer to buy. Sometimes it has enough power to hit
the top channel and then retrace to the center line, but it needs volume and
strength to do this. Probably will be ok if he watches when it gets near the
center line. TONY
-----Original Message-----
From: Brookemail@xxxxxxx <Brookemail@xxxxxxx>
To: metastock-list@xxxxxxxxxxxxx <metastock-list@xxxxxxxxxxxxx>
Date: Friday, October 09, 1998 10:10 PM
Subject: DELL danger signs
>I've attached a chart of DELL that shows the stock from July to the
present.
>You can see how some buyers might think they have a leg to stand on --
albeit
>a very thin, shaky leg.
>
>In a minute I'll send another note with an attached chart of DELL in
October
>and November of last year, when it plummeted. You can see the same
precipitous
>drop back then, and the 5-day variable moving average falling through the
>11-day VMA, as it did yesterday. You can also see how the stock attempted
to
>rally then, rose back up to the 5-day VMA and then plummeted again. The 5-
and
>11-day variable moving averages are similar to the 9- and 21-day
exponential
>averages, btw.
>
>The point is that you can see the danger signs this time around. The 5-day
VMA
>has just fallen through the 11-day VMA. Usually, that would be a signal to
>sell, not to rush back in. Furthermore, parabolic SAR and the Bull/Bear
system
>remain negative.
>
>This is not to rule out a sustained rally. It is to suggest, though, that
>there might be an opportunity to short the stock near the 5-day VMA (or
9-day
>VMA), or using another plot, near the red support line at 55.5. The
emphasis
>is on might. If the stock does attempt to rise above the 5-day VMA and
fails,
>that's all the more reason to consider shorting.
>
>As for buying right now, it's dangerous. But whaddo I know?
>
>Brooke
>
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