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Guy Gordon wrote:
>
> Oops! I put the chart in the wrong directory. Try again. It will
> work this time.
>
> Also, I posted agph.htm, asnd.htm, cube.htm, intc.htm, iomg.htm,
> pair.htm, and qntm.htm.
>
> On Tue, 26 Aug 1997 08:08:30 GMT, I wrote:
>
> >Here's an interesting chart: http://www.white-crane.com/apm.htm
> >Applied Magnetics makes thin-film and magneto-resistive heads for disk
> >drive makers.
> >
> >My problem on this chart is that I can draw TWO perfectly good Raff
> >Regression channels on APM. Which one is the price really on?
> >
> >The first channel is from 6/26/97 to 8/19/97, and then extended right.
> >Parallel to this channel I generate a trendline using a Linear
> >Regression line on the 26-day Moving Average, from 7/10/97 thru
> >8/19/97. All these lines are dark blue on the chart above. APM has
> >just tested the trendline twice.
> >
> >On a shorter term basis, I draw a light-blue Raff channel on APM from
> >7/15/97 thru 8/25/97, and extend it right. APM is in the middle of
> >this channel. This channel is not yet verified by my 26-day average,
> >though in the last week you can see just a hint that the average is
> >turning to run parallel to it.
> >
> >My question is: Short of waiting for one of these channels to be
> >violated, are there any good indications of which one the stock will
> >take?
> >
> >
Howdy Guy , Jim;
I have been looking at this problem of " where to start/stop Raff
Channels.
Two areas that I have been looking at to alleviate the uncertainty:
1) Use RSI extremes (above 80 0r below 20) as start stop points.
Notice on your APM chart that the RSI extreme would have given a good
channel similiar to your smaller channel. I have been looking at this
approach and trying to see if it holds up and makes sense. It says that
you start a channel when the momentum peaks.
2) Approach #2 :
Forget about the closing prices !
Build your Raff Channel about the Moving Average that you are using.
For instance,a Raff channel about the 20 day EMA or 20 day TSF.
I would like to hear any comments you might have on these two
approaches.
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