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Re: Duster post# 9989

Friday, 12/31/2004 10:14:45 AM

Friday, December 31, 2004 10:14:45 AM

Post# of 62520
yes Duster ... low-liquidity means the price should move easily in either direction.

I use it to confirm/negate other indicators.
If I deem a stock to be oversold with a nice base building with volume and TA-indicators starting to turn up => I look at the LR and see that it has fallen to a relatively low level. This makes me feel good about getting into it and expecting a good move in the direction of least resistance .. up in this case.

If I see a relatively high LR, I will not enter a position in the stock because it is still too much in the gambling stage without an expectation of a large move ... so even if TA tells me it looks good, if LR says not much reward available yet, I'll wait for a better risk/reward.

just my humble 2-cents worth!

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