Comments on: Agrium Inc, Canadian Tire Corp, Yellow Pages Income Fund – By The Numbers

By: John A

John A — Thu, 15 Oct 2009 19:34:18 +0000

Hi Jon.. Thanks for the explanation!! The website for the calcns. was very interesting. I have studied and used Tech. Analysis in various forms for a long time but never was aware of the market makers internals and the importance of these supt and res levels. Its something I shall add to my stock surveys. Also, do you know of any stats that track stock behavior after breaks above or below the res and supts?

Thanks again… john

By: Roy

Roy — Thu, 15 Oct 2009 19:23:58 +0000

It sure helps. Thanks Jon. Much appreciated.

By: Tech Talk

Tech Talk — Thu, 15 Oct 2009 17:18:49 +0000

Hi Roy, in the case of my calculation, using pivot points as indicated above, if a stock breaks resistance or support then new levels would be created based upon the high, low and close price for the day.

I know Donny V likes to chart it, so in that case if you have a breakout above (or below for that matter) a predeterminied level as a result of forming a new trend or reacting to market events then new levels would be formed. Calculating support and resistance levels is not an exact science, but a number of options could occur in determining the next level. The use of bollinger bands or moving averages are two such methods, or even opening up the time horizon to include levels reached during past events (eg. reverting from using 1-month data to 3-month).

Donny V would certainly be able to go into more detail than I what I’ve provided here, but I hope that helps.

Jon

By: Roy

Roy — Thu, 15 Oct 2009 16:33:12 +0000

Jon
What happens when a stock breaks the 2nd resistance? Is there no more resistance left EG SAP.

By: Tech Talk

Tech Talk — Thu, 15 Oct 2009 16:07:32 +0000

Hi Nirmal,
Certainly, I could definitely look into that. It looks like it would be a really useful addition to the Education section as well since this site mentions these technical indicators quite often.

In the meantime, you can refer to Don’s “Comining Seasonal Investing with Technical Analysis” report.

Let me see what further I can come up with.

Jon

By: Nirmal Ghosh

Nirmal Ghosh — Thu, 15 Oct 2009 14:03:24 +0000

Jon
Could please write an article on how to USE all these Technical Analysis.
I like the 9 boxes that you show the numbers, but I am not 100% sure how to use them.
A simple guide will be very useful for us private investor.Thanks
NG

By: Tech Talk

Tech Talk — Thu, 15 Oct 2009 13:51:07 +0000

Hi John A, I think the confusion exists on the fact that the data contained within the “green” areas, the numbers, represent the support and resistance as of the close of trading. In essence they represent today’s support and resistance values and the the comments contained within the chart are based on activity that happened throughout the day (comparing one day to the previous). The calculations under the methodology I am using for support and resistance in the By The Numbers reports are as follows:
—
The calculation for the new day are calculated from the High (H), low (L) and close (C) of the previous day.

Pivot point = P = (H + L + C)/3

First area of resistance = R1 = 2P – L
First area of support = S1 = 2P – H
Second area of resistance = R2 = (P -S1) + R1
Second area of support = S2 = P – (R2 – S1)
—
That excerpt above was taken directly off http://www.pivot-point-trading.com/, so my thanks to them. The above calculation represents the easiest way to calculate these levels for the volume of stocks I am analyzing, currently at 557 securities. All of the data, both current day and prior day, is included in the CSV document attached to each report.

The calculation of these levels is very much subjective, and everyone has their own prefernce of doing it. Donny V is using alternate methods in his analysis which can be viewed in the two reports he publishes daily, Tech Talk and Technical Comments on Equities in Today’s News.

Hope this helps,
Jon

By: John A

John A — Thu, 15 Oct 2009 04:59:16 +0000

Hi .. Ditto for AGU. The day high was 54.61 while the analysis says it broke resistance 1 at 54.79

By: John A

John A — Thu, 15 Oct 2009 04:55:19 +0000

Hi Don.. For YLO-UN. TO, the analysis says it broke thru the lower resistance (1) OF 5.67. A 10-day chart using say 30 min bars shows the resistance of 5.65 which appears quite strong as it has been a wall for this time. The high today was 5.65 so how could the 5.67 be broken?
Thanks for your continuing great web site…. John