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The Faraj List of Explosive & Exploding Stock


melfaraj - Fri, 27 Dec 02 :

fingers, avm

the relevance of previous lines of support and resistance never fades. however can be likened to the effect of gravity, the further away the less the relevance or the impact. and as you rightly pointed out the 30 level is highly significant in the context of avm because of the duration at which this stock dwelled in this range. other highly relevant factors would be how many times the stock visited, touched down or up the r/s line, the more the numbers the more the relevance. additionally you can look at the levels of s/r relative to fib retracement levels and moving averages, commonly 200 weighted ma, but i now use 150 wma to account for the higher prevailing levels of volatility. in a nut shell, the more factors and indicators line up the more is the relevance.

in practice i commonly go back 3 years and as far as 5 years. on detailed analysis i would examin one year, 6 months, 3 months and down to intraday and at times a number of intraday charts for consecutive trading days. it should be noted however that intraday charts emit a lot of noise, so are less reliable except for the general direction of the stock movement and momentum. even within intraday one might examin 5 minutes, 15 minutes and one houlrly charts.

it is almost like a scientist studying the universe, he would look at the totality of it and down to the atom and sub atoms in order to arrive at a coherent picture.

i hope i have not complicated the issue beyond the practical. the truth is once your mind has locked in on the subjectmatter you do these things naturally zooming in and out and even developing a feel for a stock through its charts. initially the process has to be deliberate and mechanical. have you ever tried ball room dancing or playing a musical instrument, it hardly flows to start with, but even the most acomplished started from somewhere!

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