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Past Weekly Bulletins
How's America's next candidate for the millionaire's list doing today? Fine I Trust?! Why wouldn¡¦t you be? You live in the finest country in the history of the world; could anyone ask for a better opportunity than that for ultimate success? I think NOT!
Now rap your brain around the rest of the story:
We may not be able to collectively figure out who our next President is going to be, but by gum, we can figure out how to make some big bucks! Yes, Big Bucks! When was the last time you make a high profit Trade, probably very recently if you've been doing your homework.
The RollingStock100 (RS100) is dedicated to expanding your research ability. Why, you ask? Because research is the key to every nook and cranny of the stock market, therefore, that statement holds true for Trading Rolling Stocks as well. On a daily basis, the immeasurable number of research sites on the Internet flabbergasts me. Most of which are equipped with a tremendous amount of versatile tools. Have you been pumping in key words to you favor search engine; i.e., MSN, Yahoo!, Jeeves, etc? If not, why not?
Even RS100, as small as it may be compared to one of the big boys, like ¡§The Motley Fool,¡¨ has several tremendously useful tools. In fact, it¡¦s probably complete enough that you could use it as your home base (and of course, I hope that you do¡K I do ƒº.) Even so, don¡¦t stop looking outside your home base. Roam the Internet, find out how others are locating the best stocks and making the hottest Trades and bring that information back home to the RS100 for this newsletter or a post in the forum. Nothing would better than pumping the Weekly Update up with your input, whether it¡¦s new Rollers, better chart designs, or intriguing Trading theories. Send in your findings. We all want to hear your strategy for making it big as a Trader. That's what being part of a winning team is all about.
Okay enough Cheerleading for today, now lets get down to business.
Three new stocks have been added to the List since last week, while a few were removed. Jason R. B. is the Market Warrior who supplied them to us. In his email, listed at the bottom of the message, are several other quality stocks you may want to consider. Take a look at BBBY since the last issue of the Weekly Update, you'll be impressed!
The idea of sending out Updates that are more frequent is being seriously considered. It seems that as soon as the Weekly Update is sent out, another terrific stock tip hits the RS100¡¦s door and is forced to sit and wait until several days go by before it¡¦s sent out to our members. This is kind of a waste of a potentially great piece of information in most cases. Did ya' know?
What the indicators on a chart indicate?
An indicator is a series of data points that are derived by applying a formula to the price data of a security. Price data includes any combination of the open, high, low or close over a period. Some indicators may use only the closing prices, while others incorporate volume and formulas. The price data for one period is entered into the formula and one data point is produced.
A series of data points over a period of time is required to create an indicator. By creating a series of data points, a comparison can be made between present level and the past levels of the data points. For analysis purposes, indicators are usually shown in a graphical form above or below a security¡¦s price chart. Some of the more popular graphical forms include histograms, line charts and oscillators. Once shown in graphical form, an indicator can then be compared with the corresponding price chart of the security.
An indicator can act as an alert to study price action a more closely. If momentum is waning, it may be a signal to watch out for a break of support. If there is a large positive divergence building, it may serve as an alert to watch for a price breakout.
Indicators can be used to confirm other technical analysis tools. If there is a breakout on the price chart, a corresponding moving average crossover could serve to confirm the breakout. If a stock breaks support, a corresponding low in the On-Balance-Volume (OBV) could serve to confirm the break. Some Traders use indicators to predict the direction of future prices as well.
An indicator offers a different perspective from which the price chart of a security can be analyzed. Some, such as moving averages, are derived from simple formulas and the mechanics are relatively easy to understand. Others, such as Stochastics, have complex formulas and require more study to fully understand and appreciate. Regardless of the complexity of the formula, indicators provide a distinct perspective on the strength and direction of a price chart.
A simple moving average is an indicator that calculates the average price of a security over a specified number of periods. If a security is exceptionally volatile, then a moving average will help to smooth out the data. A moving average helps filter out much of the random noise and offers a smoother perspective of the price action. For example, by applying a 20-day simple moving average to a price action of a chart, a different perspective can be gleaned and the random fluctuations can be placed within the context of a broader trend.
At times traders ignore the price action of a security and focus solely on an indicator. Indicators filter the price action of a security by using formulas. As such, they are derivatives and not direct reflections of the price action. This should be taken into consideration when applying analysis. Any analysis of an indicator should be taken with the price action in mind. What is the indicator saying about the price action of a security? Is the price action getting stronger? Weaker?
Even though it may be obvious when indicators generate buy and sell signals, the signals should be taken in context with other technical analysis tools. An indicator may flash a buy signal, but if the chart pattern shows a descending wedge with a series of declining peaks, it may be a false signal. On a chart, MACD may form a large positive divergence in July, a smaller positive divergence in August and move into positive territory. All the earmarks of a MACD buying opportunity would be present here, but the stock may have failed to break above the resistance. This non-confirmation from the stock should have served as a warning sign against a long position.
As always in technical analysis, learning how to read indicators is more of an art than a science. The same indicator may exhibit different behavioral patterns when applied to different stocks. Indicators that work well for IBM might not work the same for Delta Airlines. Through careful study and analysis, your expertise with the various indicators will develop over time. As this expertise develops, certain nuances as well as favorite setups will become clear to you.
There are many, many indicators in use today, with new indicators being created all the time. Technical analysis software programs come with dozens of indicators built in, and even allow users to create their own. Given the amount of hype that is associated with indicators, choosing an indicator to follow can be a daunting task. Even with the introduction of so many new indicators, only a select few are worthy of attention. Oddly enough, most of the indicators that turn out to merit attention have been around a long time and have stood up to the test of time. When choosing an indicator to use for analysis, choose carefully. Attempts to cover more than five indicators are usually futile. It¡¦s best to focus on three or so indicators and learn their intricacies inside and out. Try to choose indicators that complement each other, instead of those that move in unison and generate the same signals. For example, it would be redundant to use two indicators that are good for showing overbought and oversold levels. There is more information on the differences in indicators that can be found at http://stockcharts.com by Arthur Hill.
Try nosing through The Classroom for additional information on indicators as well.
If you'd like to view the past Weekly Bulletins, there are a variety of places to go. Take you're pick! You'll find they're easily accessible for your viewing at Delphi Forums, RS100's Premium Board, Yahoo! Clubs, MSN Clubs, The Motley Fool, Lycos Clubs, and The Raging Bull.
I know what your thinking... What idiot?! Would have seven different message boards for their web site and post the identical information on each!? Well the answer is simple...LLH that's who :-0) If you've read this far you're probably expecting to stumble upon my reasoning for this about now? So here it is: each of my message boards are located in popular "communities" catering primarily to the financially minded web surfer. When one of these investing voyagers of the net drift onto one of the RollingStock100 message boards, the inclination is to click over and check out the web site that's sponsoring it...namely this one, RollingStock100.com! It's just a method of attracting future members by giving them a trail of bread crumbs to follow.
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