Kevin_in_GA
4,599 posts
msg #80761
- Ignore Kevin_in_GA |
10/7/2009 7:25:58 AM
Chet:
Right. That's what the test I ran indicates - a stock that clsoes above the upper BB is generally overpriced (although some argue that it is showing a strength that can carry it higher). I think that it means there will be a short-term reversion to the mean.
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decipherlinda
133 posts
msg #80764
- Ignore decipherlinda |
10/7/2009 7:56:00 AM
My notes from Bollinger on Bollinger Bands:
Keep in mind, though, that as a stock price at the upper band goes higher, the upper BB goes up with it. A stock price can “walk up” the upper BB each day for a long time before reverting to the mean (MA(20)). This is one of the times when using other technical indicators is very useful.
The touching of an upper band or lower band can be confirmed with another technical indicator. When a price is high and hits (or “tags”) the upper BB, if the technical indicator is not going in the same direction, it means you can expect the price of the stock to begin to revert to the mean. The same is true (in reverse) for theprice at the lower BB.
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Kevin_in_GA
4,599 posts
msg #80765
- Ignore Kevin_in_GA |
10/7/2009 8:07:35 AM
My notes from Bollinger on Bollinger Bands:
Keep in mind, though, that as a stock price at the upper band goes higher, the upper BB goes up with it. A stock price can “walk up” the upper BB each day for a long time before reverting to the mean (MA(20)). This is one of the times when using other technical indicators is very useful.
The touching of an upper band or lower band can be confirmed with another technical indicator. When a price is high and hits (or “tags”) the upper BB, if the technical indicator is not going in the same direction, it means you can expect the price of the stock to begin to revert to the mean. The same is true (in reverse) for theprice at the lower BB.
++++++++++++
Interesting ... I had been trading off of momentum-based indicators like the MACD and CMO for a while, but felt that they lagged too much from the price action. What specific indicators are you thinking about here that would confirm a BB signal?
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gabestogie
79 posts
msg #80770
- Ignore gabestogie |
10/7/2009 9:42:52 AM
Kevin:
Looks like the Shorts are trying to cover. There is a high float of shorts @ 35.2% 0n STEC, they have 2.7 days left to cover.Hoping to close above 28.85 and then next major resistance point will be 30.69. Stec was one of the top 5 gainers premarket today.
Gabe
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decipherlinda
133 posts
msg #80775
- Ignore decipherlinda |
10/7/2009 10:51:32 AM
The preferred indicators for use with BBs are volume indicators.
First, John Bollinger recommends normalizing technicals this way:
Normalized or Relative Volume: Divide volume by its 50-day MA * 100, plot same as regular volume. Plot a reference line at 100. Recomends normalization for indicators in general, if applicable. I tried on SF but wasn't as clear a read as SF's indicators although better, I'm sure.
From a table I created in my notes:
Categories of Volume Indicators (Bollinger on Bollinger Bands)
Periodic price change --> On Balance Volume, Volume-Price Trend
Periodic volume change --> Negative and Positive Volume Indices
Intraperiod structure --> Intraday Intensity, Accumulation Distribution
Volume weighting --> Money Flow Index, Volume-Weighted MACD
I can email a copy of my 11-page summary of Bollinger on Bollinger Bands for those interested.
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Kevin_in_GA
4,599 posts
msg #80781
- Ignore Kevin_in_GA |
10/7/2009 2:05:50 PM
Kevin:
Looks like the Shorts are trying to cover. There is a high float of shorts @ 35.2% 0n STEC, they have 2.7 days left to cover.Hoping to close above 28.85 and then next major resistance point will be 30.69. Stec was one of the top 5 gainers premarket today.
Gabe
+++++++++++
STEC is still swimming against the market current today - only at 27.86 right now (up $0.10 from yesterday).
In general the portfolio is at net neutral for today. Thanks most to BJRI (up 6.5% right now).
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Kevin_in_GA
4,599 posts
msg #80789
- Ignore Kevin_in_GA |
10/7/2009 2:32:19 PM
CCK is giving a SELL signal right now. Up +14.25% since purchase on 9/4/09.
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Kevin_in_GA
4,599 posts
msg #80796
- Ignore Kevin_in_GA |
10/7/2009 6:13:17 PM
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Kevin_in_GA
4,599 posts
msg #80797
- Ignore Kevin_in_GA |
10/7/2009 6:52:47 PM
Interesting article (focused on day trading) that highlights the use of Bollinger Bands in setting up trade entries and exits:
http://blog.afraidtotrade.com/bollinger-bands-candles-and-divergences-on-range-days/
LINK
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Kevin_in_GA
4,599 posts
msg #80819
- Ignore Kevin_in_GA |
10/8/2009 9:15:12 AM
Just to let people know - I will no longer be adding new stocks onto the trade list in the first post. I am letting the current portfolio play out to see how it fares, but will not be entering into any additional trades on this for now.
I'll keep updating the open trades list, and continue to post new confirmed BUY signals for others. I remain confident that this system works, and is a viable strategy for longer term investments (from 1-4 months). I personally want to using my remaining funds to evaluate other methods, and will begin posting on those ideas next week.
Will sell CCK at the open, as the system requires. Right now it is at 28.62 which translates into a gain of +15.82% since 9/4/09 (22 trading days).
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