Technical Analysis of Stock Trends

Buy the Dow –the analysis

Posted on Sep 28, 2009 by WHC Bassetti.

Let us now discuss some of the most fundamental principles of technical analysis.  Trendlines.  Trendlines could well be called signal lines, and sometimes we do.  The breaking of tendlines is always significant.  The longer the trendline, the more important the signal.  Buying on the break of trendline A here is obviously extremely aggressive — and the most profitable, but as we know there is a high degree of risk that the trend will not continue.

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Sell RIMM. iphone too tough. Great charts.

Posted on Sep 25, 2009 by WHC Bassetti.

RIMM is a chartist’s dream.  Look at this chart.  It’s a theoretical wonder.  Talk about dependable signals.  In ’06 it  breaks out of  a consolidation formation on power bars, booms up, forms a flag (or pennant), powers out of it, forms a double top with a perfect neckline (as wll as an upsloping trendline, breaks it and craters, forms double bottom with great neckline, breaks out and finds resistance just around the old neckline.  If you didn’t know better you might say the invisible hand of the market is drawing this to validate all the material in Technical Analysis of Stock Trends, 9th Edition.

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Dow Up? Dow Down? Dow Turn Around? Also, two way street…

Posted on Sep 24, 2009 by WHC Bassetti.

Readers should be aware that it is a good idea to subscribe to the edwards-magee google group at http://groups.google.com/group/edwards-magee

We frequently post material there and there is an intelligent and alert group of subscribers.

We just posted a letter there open to the public.  This letter may also be found at:

http://www.edwards-magee.com/ggu/dowbottomsep09.pdf

A TWO WAY STREET

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Hot stocks. Ford. AMR. LCC. JBL. MISC.

Posted on Sep 23, 2009 by WHC Bassetti.

You can tell we’ve been looking at the hot stocks, which we do sometimes for amusement, just to check the permutations of human folly.

We bought F back around the bottom because the depths of human folly were being explored and it seemed foolish not to take advantage of it.  Profits on that trade, still open, in the hundreds of percents.

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Buy General Mills? Yawn.

Posted on Sep 23, 2009 by WHC Bassetti.

Ordinarily you look at action like this from yesterday’s hot stocks and you see a buy signal.

A clearly defined horizontal line.  A big breakout.  Clear buy signal.

But then you look at the big picture.

Who wants to commit capital for a possible gain of 6 or 7 points?  In the present economic climate we consider it highly unlikely that GIS could take out its old high and make the trade worthwhile.

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