StockFetcher Forums · General Discussion · Hit Me Baby One More Time: Fundamental Analysis vs. Technical Analysis<< 1 2 >>Post Follow-up
EWZuber
1,373 posts
msg #45108
Ignore EWZuber
6/19/2006 4:32:52 AM

nikoschopen, interesting, but why would you wait for stochastics to enter overbought territory before entering??
I enter just as the slow stochastics (5,3,3) fast %K line is crossing above the slow %D line and the change of trend is confirmed by a break of the Resistance Trend Line at the same time.
This fast line crossover could happen at any stochastic value.



nikoschopen
2,824 posts
msg #45131
Ignore nikoschopen
6/19/2006 6:10:35 PM

EWZuber,

I equate the Stoch(39,1) as a weekly indicator while treating the 7-period stoch as a daily indicator. Hence, when the stoch(39) is at or above 70 ("overbought") it tells me that the longer term outlook of the stock is bullish. Once the Stoch(39) is above 70, I would enter the trade only when the stoch(7) has crossed above 30 for the simple reason being that it's considered "cheap". I suppose this analogy is no different from the "RSI < 1" acrobatics ure undoubtedly familiar with. The method of execution for these two setups may be different, but they share the same fundamental objective: buy cheap and sell dear, especially when the longer term outlook is bullish.



EWZuber
1,373 posts
msg #45161
Ignore EWZuber
6/20/2006 5:50:04 PM

These charts reveal the essence of the Convergent Stochastic Theory.
I chose this time in the chart because it is fairly easy to see the relationships.
Here, around May 2005, all charts are beginning a new accumulation phase at just about the same time.
Notice the Weekly Chart accumulation phase in Feb was mitigated by the dominant Monthly Chart which was in solid distribution.
For that brief time in Feb both the Weekly and Daily Charts were in phase in accumulation, consequently the daily chart experienced a pretty full accumulation phase ( but still only went high enough to test and confirm the 50 DMA as resistance). However they both went into distribtion again, putting Monthly, Weekly and Daily Charts all in phase together in distribution which created a synergy of distribution and a fast and furious drop to the Monthly Chart 25 MO.MA.

http://server4.pictiger.com/img/379286/other/comp-2-yr-monthly-chart.jpg
http://server4.pictiger.com/img/379287/other/comp-2-yr-weekly-chart.jpg
http://server4.pictiger.com/img/379288/other/comp-daily-chart-shows-exact-buy-point.jpg
Upload Images for FREE with www.PicTiger.com

A similar situation is now taking place as we speak. We need to see if support is confirmed at the end of this month on the Monthly Chart and the phase relationships of the Weekly and daily Charts at that time.




nikoschopen
2,824 posts
msg #45174
Ignore nikoschopen
6/21/2006 8:06:08 PM

Nice analysis. Although I have stated that the Stoch(39) is equivalent to a weekly indicator, what I had in mind was that it be served as a frame of reference for the short-term indicator, namely Stoch(7). Frankly, as a daytrader who has no qualm about flipping trades from long to short and vice versa within a matter of seconds, I place no great value on the weekly timeframe.

Another so-called trick I would like to share is what I call "trip & fall". Basically, it's a divergence play between the two Stochastics. For example, the Stoch(39) remains below 30 while the Stoch(7) has been ramping up for some time. However, the Stoch(7) stalls at or near 50 and subsequently makes a U-turn and retraces. This is a classic short setup.

http://tinyurl.com/mjyng


EWZuber
1,373 posts
msg #45180
Ignore EWZuber
6/22/2006 4:55:23 AM

nikoschopen
It's a bit similar. Here's what that chart looks like from a CST standpoint;

http://server3.pictiger.com/img/370772/other/rimm-weekly-chart.jpg
http://server3.pictiger.com/img/370773/other/rimm-daily-chart-oct-2005.jpg
http://server3.pictiger.com/img/370774/other/rimm-daily-chart-march-june-2006.jpg

These same principals apply to all time frames. Daytrading on the Hourly, 5 minute or 1 minute charts is all the same indicators and triggers.


StockFetcher Forums · General Discussion · Hit Me Baby One More Time: Fundamental Analysis vs. Technical Analysis<< 1 2 >>Post Follow-up

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