A CHARTISTS PRICE GUIDE FOR NON-CHARTISTS.

Hi MITZIS

MNW - 1552.50p .. Blimey .. certainly an 'explosive' breakout, and at this moment in time, its not showing any signs of stopping .. but it obviously cannot sustain such a sharp uptrend indefinately, without taking a breather .. so how much further can it go ? .. I wish I knew.



The danger of such a strong rise, is getting caught up in all the excitement on the stocks thread, and believing the price can reach levels that are not really achievable .. and if the rise is overdone, it can be easy to get caught out with any subsequent sharp correction.

So its a matter of trying to anticipate at what levels the rise is likely to be halted, and trying to identify the first signals that the uptrend is reversing .. which ain't easy.

With the price high in 'unchartered territory', there are no 'historical' resistance levels to worry about, but there will be 'psychological' levels that will provide resistance for the rising price, so its a matter of trying to identify these, and to closely watch the price reaction as it approaches these levels.

The obvious strongest psychological levels, will be at £10 intervals, closely followed by the mid £5 levels, so having just moved up through £15, this should provide a very solid support level just below for any subsequent retracement. Should this support level fail, this would suggest that its recent price rise has been well overdone, and further retracement is likely.

Each £5 interval can then be split down again as a 'general guide', either into £1 intervals, or 'mid prices .. but this is probably all getting a bit complicated.

A visual view is often the easiest .. just draw the underlying uptrends underneath the low points, and when the price starts dropping below these lines, it will provide the first signal that its uptrends are beginning to fail.



Its easy to 'buy' a stock, its the 'selling' that is the hard part.

Sorry, I'm waffling again.