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A chart illustrating the trading strategy I described earlier is attached.
These patterns are not uncommon late in a market correction and early in its
recovery. This market has been recovering from the last pullback long enough
now that the patterns are harder to find. I am inclined to trade breakouts
at this point.
Dan
In a message dated 11/10/1999 6:48:52 PM Mountain Standard Time,
HARELSDB@xxxxxxx writes:
<< My experience has been that StochRSI is not real good at generating
trading
signals for my style of trading. I use it by paying closer attention to a
stock that is relatively overbought or oversold based on StochRSI and timing
my entry based on some other signal. Relatively overbought or oversold
could be set based on either of the pairs of values for StochRSI that you
suggested depending on your tastes, or more precisely, your stomach.
One trade that has worked well for me is to set up an exploration that looks
for low StochRSI values among a group of stocks that have a high strength
relative to the market (i.e. a high RS, not a high RSI). This gives me a
watch list of strong stocks that have corrected. I time my entry into these
stocks by watching for a violation of the near term downtrend line, a test
of
the bottom put in before the trendline violation and two consecutive days
with higher highs after the test of the bottom. This tells me the
short-term
downtrend has reversed and the strong stock is ready to resume its move up.
I place my stop just below the low of the test of the bottom in case I am
wrong.
Dan
<x-html><!DOCTYPE HTML PUBLIC "-//IETF//DTD HTML//EN">
<html>
<head>
<title>HTML document for the World Wide Web</title>
<meta name="GENERATOR" content="MetaStock 6.0">
</head>
<body>
<h2 align=center>AMKOR TECHNOLOGY<br>
(AMKR) </h2>
<p align=center><img src="AMKR.jpg" align=bottom> </p>
<h3 align=center>Data for 11/10/1999 </h3>
<div align=center><center>
<table border=1 ALIGN="CENTER">
<tr><td><table ALIGN="CENTER">
<tr><td><font FACE="Arial"><font color="#000000">Exp Trend</font></font></td><td><font FACE="Arial"><font color="#000000">N/A</font></font> </td></tr><tr><td><font FACE="Arial"><font color="#000000">AMKR</font></font></td><td><font FACE="Arial"><font color="#000000"></font></font> </td></tr><tr><td><font FACE="Arial"><font color="#000000">Open</font></font></td><td><font FACE="Arial"><font color="#000000">23.00</font></font> </td></tr><tr><td><font FACE="Arial"><font color="#000000">High</font></font></td><td><font FACE="Arial"><font color="#000000">25.63</font></font> </td></tr><tr><td><font FACE="Arial"><font color="#000000">Low</font></font></td><td><font FACE="Arial"><font color="#000000">22.75</font></font> </td></tr><tr><td><font FACE="Arial"><font color="#000000">Close</font></font></td><td><font FACE="Arial"><font color="#000000">25.63</font></font> </td></tr><tr><td><font FACE="Arial"><font color="#000000">Volume</font></font></td><td><font FACE="Arial"><font color="#000000">1,328,200</font></font> </td></tr><tr><td><font FACE="Arial"><font color="#000000">Open Int.</font></font></td><td><font FACE="Arial"><font color="#000000">0</font></font> </td></tr><tr><td><font FACE="Arial"><font color="#000000">Price Chg.</font></font></td><td><font FACE="Arial"><font color="#000000">2.81</font></font> </td></tr><tr><td><font FACE="Arial"><font color="#000000">StochRSI</font></font></td><td><font FACE="Arial"><font color="#000000">0.7017</font></font> </td></tr>
</table>
</td></tr>
</table>
</center></div>
</body>
</html>
</x-html>From ???@??? Thu Nov 11 15:57:22 1999
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From: "Nicholas Kormanik" <nkormanik@xxxxxxxxxx>
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Subject: RE: StochRSI 'Alert' Levels
Date: Thu, 11 Nov 1999 14:01:03 -0700
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Status:
Steve, Dan, Jim,
Thanks for your inputs. Regarding that stock I was watching, longer-term
StochRSI just crossed up past the **25** level, and **now** buying activity
is suddenly picking up.
I guess people don't know that it was supposed to be either the 20 level, or
the 30 level --- but not in between.
Sheesh!! these amateurs....
Nicholas
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