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serfdom   Thursday, 09/08/05 07:06:18 PM
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Post # of 71720 

This is the latest charting technique from our friend Ken Goodrich on the Stock Seasonality board. Thanks Ken!

We have always endeavored on the StockSeasonality message boards to keep the understandings about seasonality and entry points for qualified buys simple so that our members could compound the interest in their portfolios at a safe and simple pace.

We have stated long ago the amazing power of the Aroon indicator to help you discern a trend for your seasonal stocks. I tell you now, keep it simple. All of our setups in this first series will revolve around what I think is the most powerful initial setup in the investment world, The Magic Box. Our Fairy Square setup comes from following the actions of the Magic Box. Now, to follow suit and to keep it simple, our Knight’s Crossing, also follows the initial setup of the Magic Box.

You may ask why Flota and I decided to name it the Knight’s Crossing. It is because once you have focused on these two indicators following the Magic Box, you become King of your own destiny concerning that stock, and the Knights belong to you!


We look for the common denominator of all big, sustained moves in a stock. The Knight’s Crossing occurs when:

1. The close of the stock's price CROSSES above the 5 SMA (5-day simple moving average)

2. The D+ in the ADX indicator CROSSES the 20 to the upside.

These 1st & 2nd Knight’s Crossing do not have to occur simultaneously and they could even occur during the initial setup of the Magic Box. It is that simple.

Your hope is that your Knights lead the 5 day moving average above the median line of the Bollinger Band (20), which is also the 20 day moving average. This can lead to huge gains. You may wish to hold the stock either as long as the stock’s close is above the 5 day moving average, and/or the 5 day moving average is above the median line.

In the example HGR chart you can see that the 1st Knight’s Crossing, i.e. price close above the 5 SMA occurred on June 10th, then it "galloped along" until the confirmation by 2nd Knight’s Crossing, i.e. D+ in the ADX crossing the 20 to the upside, which occurred on June 15th.


Trading: It is highly recommended that you paper trade the system to familiarize yourself with it thoroughly. As with anything in life nothing is guaranteed, so, always use appropriate stop loss according to your risk tolerance.

Research by Kenneth J. Goodrich & Flota
Annotations by Don

Good stocks are obvious. Extensive DD is how you convince yourself to buy a bad one.


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