STOCK GOODIES PLAYS OF THE WEEK

[Black_NITE]

P&F Bearish Resistance Line

A downtrend is present when prices remain below the Bearish Resistance Line. This line extends down at a 135 degree angle, which is just a 45 degree angle turned upside down (180 - 45 = 135). This angle requires a certain rate of descent. Sideways price action or a slower decline would lead to a trendline break. According to P&F theory, bearish signals are preferred when below the Bearish Resistance Line. Bullish signals should be ignored or used to take profits on short positions.



The chart above shows Qualcom (QCOM) with a Bearish Resistance Line in the latter part of 2008. Well after this line was established, the stock forged a Spread Triple Bottom Breakdown and a Triple Top Breakdown in October. The red "A" marks the beginning of October and the red "B" marks the beginning of November.