Go to Jeff Salisbury LWGate Home Page.From: "Gene Ricci" <genr@swbell.net>
Subject: [CANSLIM] Support - Resistance
Date: Thu, 19 Jun 2003 14:27:55 -0500
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|Can you say a little more about "support and resistance" trading? Dave|
Hi Dave, I believe it is key to know what the trend is (sideways, up, =
down).
If in Trading Range:
=20
Long=20
a) when going long and the stock is rangebound - buy at a prescribed =
amount above the support point. Place stop just below support point.
b) sell when stock price approaches resistance.
Short=20
a) when shorting and the stock is range bound - short at a prescribed =
amount below the resistance point. Place stop just above resistance =
point.
b) cover when stock price approaches support.
For Pullback trading in Trending market:
Long=20
a) when going long and the stock is pulling back in an uptrend - buy =
at a prescribed amount above the support point. Place stop just below =
support point.
b) sell if price can not penetrate previous high, otherwise let your =
profits run.
Short=20
a) when shorting and the stock is rising (correcting) in a downtrend - =
short at a prescribed amount below the resistance point. Place stop =
just above resistance point.
b) cover if price can not penetrate next support level, otherwise let =
your profits run.
For Breakout strategies: (If support or resistance levels are broken or =
you anticipate they will be broken):
Long
a) when going long and the stock is in an uptrend - buy at a prescribed =
amount above the resistance point when price penetrates resistance with =
stop just below resistance.
b) sell if price can not penetrate next resistance level otherwise let =
your profits run.
Short
a) when shorting and the stock is in a downtrend - short at a prescribed =
amount below the support point when price penetrates support, with stop =
just above support.
b) cover when price can not penetrate next support level, otherwise let =
your profits run.=20
Now it's time to get a bag of freshly popped popcorn and check out some =
movies:
http://www.pring.com/movies.htm
or got to StockCharts.com
http://stockcharts.com/education/What/ChartAnalysis/supportResistance.htm=
l
Here is a list of my reference books:
1) Intro to Technical Analysis - Martin Pring - $38.95 (comes with CD)
2) Breaking the Black Box - Martin Pring - $39.95 (comes with CD)
3) Come Into My Trading Room - Dr. Alexander Elder - $35.00
4) Methods of a Wall Street Master - Victor Sperandeo - $14.95
5) Secrets for Profiting in Bull and Bear Markets - Stan Weinstein - =
$19.95
We had Dallas workshop on Stan Weinstein's Method at the end of 2001
(gosh, it doesn't seem like it was that long ago), I'll dig around =
my archives=20
to locate the workshop notes and forward them to you at a later =
date.
Hope this helps,
Gene
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<DIV><FONT face=3D"Comic Sans MS"><STRONG><FONT=20
color=3D#0000ff>|</FONT></STRONG><FONT face=3D"Times New Roman">Can you =
say a little=20
more about "support and resistance" trading? Dave</FONT><FONT=20
face=3D"Comic Sans MS" =
color=3D#0000ff><STRONG>|</STRONG></FONT></FONT></DIV>
<DIV><FONT face=3D"Comic Sans MS"><STRONG><FONT=20
color=3D#0000ff></FONT></STRONG></FONT> </DIV>
<DIV><FONT face=3D"Comic Sans MS">
<DIV><FONT size=3D2>Hi Dave, I </FONT><FONT size=3D2>believe it is =
key=20
to know what the trend is (sideways, up, down).</FONT></DIV>
<DIV>
<DIV><FONT size=3D2></FONT> </DIV>
<DIV><FONT color=3D#0000ff size=3D2><STRONG>If in Trading=20
Range:</STRONG></FONT></DIV>
<DIV><FONT face=3D"Comic Sans MS"><FONT size=3D2> </FONT>
<DIV><U><FONT size=3D2>Long </FONT></U></DIV>
<DIV><FONT size=3D2>a) when going long and the stock is rangebound =
- - buy at=20
a prescribed amount above the support point. Place stop just =
below=20
support point.</FONT></DIV>
<DIV><FONT size=3D2>b) sell when stock price approaches =
resistance.</FONT></DIV>
<DIV><FONT size=3D2></FONT> </DIV>
<DIV><U><FONT size=3D2>Short </FONT></U></DIV>
<DIV><FONT size=3D2>a) when shorting and the stock is range =
bound -=20
short at a prescribed amount below the resistance point. =
Place stop=20
just above resistance point.</FONT></DIV>
<DIV><FONT size=3D2>b) cover when stock price=20
approaches support.</FONT></DIV>
<DIV><FONT size=3D3><FONT size=3D2></FONT> </DIV>
<DIV><FONT color=3D#0000ff><STRONG>For Pullback trading in Trending=20
market:</STRONG></FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV><FONT face=3DArial>
<DIV><FONT face=3D"Comic Sans MS"><U>Long </U></FONT></DIV>
<DIV><FONT face=3D"Comic Sans MS">a) when going long and the stock =
is =20
pulling back in an uptrend - buy at a prescribed amount above the =
support=20
point. Place stop just below support point.</FONT></DIV>
<DIV><FONT face=3D"Comic Sans MS">b) sell if price can not =
penetrate previous=20
high, otherwise let your profits run.</FONT></DIV>
<DIV><FONT face=3D"Comic Sans MS"></FONT> </DIV>
<DIV><FONT face=3D"Comic Sans MS"><U>Short </U></FONT></DIV>
<DIV><FONT face=3D"Comic Sans MS">a) when shorting and the stock =
is rising=20
(correcting) in a downtrend - short at a prescribed amount =
below the=20
resistance point. Place stop just above resistance=20
point.</FONT></DIV>
<DIV><FONT face=3D"Comic Sans MS">b) cover if price can not penetrate =
next support=20
level, otherwise let your profits run.</FONT></DIV></FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV><FONT face=3DArial color=3D#0000ff><STRONG><FONT face=3D"Comic Sans =
MS">For=20
Breakout strategies</FONT><FONT face=3DArial>: =
(</FONT></STRONG></FONT><FONT=20
face=3DArial>If support or resistance levels are broken or you =
anticipate they=20
will be broken):</FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV></FONT></DIV></FONT></DIV>
<DIV><FONT size=3D2>
<DIV><FONT face=3D"Comic Sans MS"><U>Long</U></FONT></DIV>
<DIV><FONT face=3D"Comic Sans MS">a) when going long and the stock is in =
an=20
uptrend - buy at a prescribed amount above the resistance point when =
price=20
penetrates resistance with stop just below resistance.</FONT></DIV>
<DIV><FONT face=3D"Comic Sans MS">b) sell if price can not penetrate =
next=20
resistance level otherwise let your profits run.</FONT></DIV>
<DIV><FONT face=3D"Comic Sans MS"></FONT> </DIV>
<DIV><FONT face=3D"Comic Sans MS"><U>Short</U></FONT></DIV>
<DIV><FONT face=3D"Comic Sans MS">a) when shorting and the stock is in a =
downtrend=20
- - short at a prescribed amount below the support point when price =
penetrates=20
support, with stop just above support.</FONT></DIV>
<DIV><FONT face=3D"Comic Sans MS">b) cover when price can not =
penetrate next=20
support level, otherwise let your profits run. </FONT></DIV>
<DIV><FONT size=3D3></FONT></FONT> </DIV></DIV></DIV></FONT>
<DIV><FONT face=3D"Comic Sans MS" size=3D2>Now it's time to get a =
bag of=20
freshly popped popcorn and check out some movies:</FONT></DIV>
<DIV><FONT face=3D"Comic Sans MS" size=3D2></FONT> </DIV>
<DIV><FONT face=3D"Comic Sans MS" color=3D#000000 size=3D2><A=20
href=3D"http://www.pring.com/movies.htm">http://www.pring.com/movies.htm<=
/A></FONT></DIV>
<DIV><FONT face=3D"Comic Sans MS"></FONT> </DIV>
<DIV><FONT face=3D"Comic Sans MS">or got to StockCharts.com</FONT></DIV>
<DIV><FONT face=3D"Comic Sans MS" size=3D2></FONT> </DIV>
<DIV><FONT face=3D"Comic Sans MS" size=3D2><A=20
href=3D"http://stockcharts.com/education/What/ChartAnalysis/supportResist=
ance.html">http://stockcharts.com/education/What/ChartAnalysis/supportRes=
istance.html</A></FONT></DIV>
<DIV><FONT face=3D"Comic Sans MS"></FONT> </DIV>
<DIV><FONT face=3D"Comic Sans MS"><FONT size=3D2><FONT =
color=3D#800080>H</FONT>ere is=20
a list of my reference books:</FONT></FONT></DIV>
<DIV><FONT face=3D"Comic Sans MS" size=3D2></FONT> </DIV>
<DIV><FONT face=3D"Comic Sans MS" size=3D2>1) Intro to Technical =
Analysis - Martin=20
Pring - $38.95 (comes with CD)</FONT></DIV>
<DIV><FONT face=3D"Comic Sans MS" size=3D2>2) Breaking the Black Box - =
Martin Pring=20
- - $39.95 (comes with CD)</FONT></DIV>
<DIV><FONT face=3D"Comic Sans MS" size=3D2>
<DIV><FONT face=3D"Comic Sans MS" size=3D2>3) Come Into My Trading Room =
- - Dr.=20
Alexander Elder - $35.00</FONT></DIV>
<DIV><FONT face=3D"Comic Sans MS" size=3D2>4) Methods of a Wall Street =
Master -=20
Victor Sperandeo - $14.95</FONT></DIV></FONT></DIV>
<DIV><FONT face=3D"Comic Sans MS" size=3D2>5) Secrets for Profiting in =
Bull and Bear=20
Markets - Stan Weinstein - $19.95</FONT></DIV>
<DIV>
<DIV><FONT face=3D"Comic Sans MS"> </FONT><FONT=20
face=3D"Comic Sans MS"><FONT size=3D2>We had Dallas workshop on =
Stan=20
Weinstein's Method at the end of 2001</FONT></FONT></DIV>
<DIV><FONT face=3D"Comic Sans MS"><FONT size=3D2> =
(gosh, it=20
doesn't seem like it was that long ago), I'll dig around my archives=20
</FONT></FONT></DIV>
<DIV><FONT face=3D"Comic Sans MS"><FONT size=3D2> to =
locate the=20
workshop notes and forward them to you at a later =
date.</FONT></FONT></DIV>
<DIV><FONT face=3D"Comic Sans MS" size=3D2></FONT> </DIV>
<DIV><FONT face=3D"Comic Sans MS" size=3D2>Hope this =
helps,</FONT></DIV></DIV>
<DIV><FONT face=3D"Comic Sans MS" =
size=3D2>Gene</FONT></DIV></BODY></HTML>
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