Replies to post #374 on Money 101 (Money)

[Stock Lobster]

For charting questios, I highly recommend DART1961 as one of the most knowledgeable chartists on Ihub, and also one of the kindest and most helpful.

However, I can make this observation. If I had $100 for everytime I bought a stock because a "golden cross" was on the charts, only to have that chart tank the next day, I'd be richer than I am...lol.

I use charts as a tool, and there are a couple of indicators I watch for.

RSI over 90 has always told me a correction is coming, and that's usually my sign to sell half or most of position and wait on the sidelines.

I also find Accumulation/distribution to be very useful for confirming that there may be company dilution into a run, especially if the A/D indicators are dropping as volume is increasing...

I think Golden Crosses are great, however a good pennant formation seems to be a better early indicator of a breakout.

That is, of course, my ignorant and flawed opinion.

[Stock Lobster]

fyi: Golden Cross
A crossover involving a security's short-term moving average (such as 15-day moving average) breaking above its long-term moving average (such as 50-day moving average) or resistance level.

Investopedia Says: As long-term indicators carry more weight, the Golden Cross indicates a bull market on the horizon and is reinforced by high trading volumes. Additionally, the long-term moving average becomes the new support level in the rising market.



Technicians might see this cross as a sign that the market has turned in favor of the stock.

http://www.answers.com/topic/golden-cross

http://img226.imageshack.us/img226/9868/goldencross78257a1dc4.jpg