News Focus
News Focus
icon url

PerfectSage

10/24/05 11:37 AM

#3527 RE: Gytheon #3520

Your welcome Gy. Here's some more input below to help you struggle with your investments. LOL Holding bonds in a rising interest rate environment is going to suck unless your planning on holding them till expiry. Suck means capital losses because when interest rates trend up, bond prices trend down.

I found this good introduction to Stan Weinstein's, Secrets For Profiting in Bull and Bear Markets for you.

Enjoy the input. PerfectSage

Stan Weinstein is one of the world's greatest technicians. His book, Secrets For Profiting in Bull and Bear Markets is a must-read for all serious investors.

Weinstein's stage analysis (outlined in his book in detail) is a simple and powerful concept to understand longer-term trends in individual stocks, as well as in the stock market.



As shown in the diagram above, there are 4 stages to the movement of stocks :

Stage 1 (The Basing Area) : Stage 1 is a time period where the stock fluctuates in a relatively narrow range. Little or nothing seems to be happening and the stock price will wander back and forth across the 200 day moving average. This period is generally called "base building".

Stage 2 (Advancing Phase) : Stage 2 is an advancing stage characterized by the stock rising above the 200 and 50 day moving averages. The stock may drop below the 50 day average and still be considered in Stage 2. Fundamentally, Stage 2 is triggered by a perception of improved conditions with the company.

Stage 3 (The Top Area) : Stage 3 is the "topping out" of the stock price action. Typically the price will begin to cross the 200 day moving average towards the downside, and the average may begin to round over on the chart. This is the time to take profits.

Stage 4 (The Declining Phase) : Finally, the Stage 4 decline begins. The stock price drops below the 50 and 200 day moving averages, and continues down until a new Stage 1 begins.

The diagram below, shows this in detail.



Gy, if you look at this weekly chart of NT you can see the 4 stages. See'em?