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FloatCharts.com
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October 21, 2006
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When a stock's price has been in a long decline and then rises far enough to penetrate its upper float channel line, there are three possibilities ahead. 1) The most likely possibility is that the upper float channel line will act as resistance and the price will immediately head lower. 2) The second possibility is that as the price moves lower it will find support at either its 25%, 50% or the lowest (100%) float channel line. If this happens there is a strong probability that the stock will put in a bottom and the long term trend will change from down to up. 3) The third possibility is that the upper float line has lost all resistance capability and the price will easily continue to move higher. This is the least likely scenario. Thinking that a penetration of the upper float line is a buy signal is a mistake and will easily lead to losses in your portfolio. So what did
Coca-Cola do this week? It pierced and closed above its upper float
channel line for the first time in over six years! The best chart to view
this on its monthly chart (see above). Always remember, you never ever truly know what a stock will do tomorrow. This is because stock movement is not a mechanical process. Stocks move based on the decisions of human beings and predicting human decisions is never certain. If a large number of the people owning the stock mentioned above were to decide tomorrow that they wanted to sell then the stock could easily sell off. If a large number of people decide to buy then this stock could easily blast higher. It all depends on the decisions of people. STUDY THE
CHARTS ABOVE Have a Good Week, Be Prosperous, and Keep in Touch
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INFO ON OUR PREMIER FLOAT CHARTS WEB SITE Want to find stocks like those above? Check Out Our Web Site and Consider subscribing to www.FloatCharts.com. We track Float Turnovers on over 7000 stocks and scan the market for ABC Float Set-Ups, Breakouts and Breakdowns that are poised to make big gains. Our Float Charts Central site is the world's premier site for Float Charts and Float Analysis. We also send out Stock Alerts and a Weekly Newsletter. Check us out! At www.FloatCharts.com we're always on the lookout for trading opportunities. We currently have a Silver ($30 a month) and a Gold ($75 a month) Package. Visit our homepage and see the results of some recent stock picks (near the bottom). You'll be amazed at the power of Float Charts and the returns our stock picks can generate. Our stock picks are based on the ideas found in Steve's book Float Analysis, Powerful Technical Indicators Using Price and Volume (Wiley, 2002). The book's former title was The Precision Profit Float Indicator (Marketplace Books, 2000). |
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