Cenes

I agree that a single indicator on its own is unreliable. However I have based the RSI levels I talked about based on research carried out in the states into how the o/sold and o/bought levels act when the market is trending up, or trending down - (most of the time it merely wanders sideways).

Similar research by Bauer & Dahlqist - 'Technical Market Indicators - analysis and performance' 1999 ISBN 0-471-19721-1 finds that the more indicators you use the less reliable the results - and the less time in the market. I cannot tell you which ones I use - trade secret but I can sure you can guess one of them! - i use about three.

Both overbought (70) and oversold (30) levels trend up TOGETHER or down TOGETHER. What you have shown at 20 and 80 - is one level trending up and the other down for a bear market. Sorry EJ but I believe you are incorrect on this.

Based on the research I have read the following holds true - to reiterate:

In a bear market the oversold level does move to 20 (support) with the overbought at 60 (resistance)

In a bull market the overbought level does move to 80 (resistance) with the corresponding support moving up to 40 (support)

In all other markets - which is most of the time - 30 and 70

One of the first signs that a trend has shifted from a bear trend to a bull trend is when the retracement occurs that the 40 RSI level is respected before the rally - which is the situation with CEN.

In the RSI chart you can see a bear period when it breached 30 , moving towards a sideways neither bull or bear situation respecting 30, and then finally as Glaxosmithkline and the other institutions announce major shareholdings etc the RSI bouncing off 40.

Hope this helps. I believe that CEN is a definte good punt for 2004.

p.s and as far as volume goes - the jury is out on this one..DYOR and all that.