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Rakesh,
One indicator I check very carefully when buying retracements is volume. I
want to see volume declining on the retracement and picking up on any move up. I
use On Balance Volume as a very quick guide and then read the individual volume
bars if a security's OBV looks interesting. I generally don't buy stocks making
fresh lows, however were I to consider doing so, I would want to see a large
volume divergence on the new low. I would look for a setup in three steps: 1)
some bars back a big decline on very high volume (the washout) and 2) several
days of decline to a new low on very light volume, and 3) a move above the high
of the low bar on strong volume with a stop at the low.
DHOM had a washout volume day a few days ago but the price bar was too
tight and barely made a new low so the washout is suspect. Volume has
dropped on the lower lows, however it remains above the typical volume prior to
the washout day. Caution is warranted
VITA has seen increasing volume on the recent down days. Caution is
warranted.
OLGC ditto.
ROIA ditto plus ragged volume.
Not saying that one can't make money here, but these are not the king of
low risk entry which I seek.
Earl
----- Original Message -----
Sent: Wednesday, November 17, 2004 8:54
PM
Subject: Re: [RT] See gif---Just for
fun!
Following look reasonably safe to enter, from a
chart
perspective only. Dont know about their fundamentals.
[1] VITA
[2] OLGC
[3] ROIA
[4]
DHOM
Any
opinions?
Regards
Rakesh
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