Replies to post #19623 on Advanced Micro Devices Inc (AMD)

[sgolds]

dougSF30, Doesn't it strike you the least bit odd that these magic numbers would be support points? Why 67%? Why not 69%? Why not 58%?

I will attempt to find if the book explains this. Meanwhile, this is my explanation: The human mind likes round numbers and simple fractions (in this case, 1/3, 1/2 & 2/3). When a trader sees that a stock has given up 1/3 of a recent runup, it attracts his attention and he wonders if it is time to jump in and take a long position. He also knows that every other trader is doing the same thing because this is a known support point. These factors reinforce each other.

Looks like it is about time for that hardware upgra

[Jack Hammered]

dougSF30 -

Fib #'s are a tool. Like any other tool you can use it, or not.

IF you were to draw a channel with respect to AMD's recent run up (6-9 months) you'd see a pattern of higher highs and higher lows. (Remember, the trend is your friend until it ends. OR, be right and sit tight.) Now you have Fib's suggesting a possible retracement point wich, coincidently, is near the lower end of the channel. Add to those TWO data points some conviction (everyone has to work that out on their own) and you have a decent entry/re-entry point.

I wouldn't ever rely solely on Fib's - but I'm always aware.

I've read somewhere during this thread, (I'm not attributing this to you, Doug.) that Fib's/TA are a self-fullfilling prophecy. Murphy addresses this early on in the book. I'll look it up if anyone has an interest. Here's a link to Amazon.com where you can read the introduction and philosphy;
http://www.amazon.com/gp/reader/0735200661/ref=sib_dp_pt/002-0910542-1611210#reader-link

If you, or anyone for that matter, are interested in learning more about Fibs you can Google out any one of a Gazillion web sites - like this one;
http://www-gap.dcs.st-and.ac.uk/~history/Mathematicians/Fibonacci.html

Having said all that, I find TA to be a usefull tool after finding fundamentaly sound investment idea's.

Best,
Jack