Using Weekly Data vs. Daily for TA of Volatile Stocks?

[adampepp]

Hi everyone,

I've been lurking on this forum for awhile and have got a boatload of great information about R1 investing! I've been spending a lot of time looking at charts (stockcharts) of some of the investments I'm watching, namely KMX, PETS, COH, LOW, and CTSH (frankly though the most I understand this is off of what I've read in morningstar analyst reports for industry companies - seems like a great buy though). SBUX looks awfully tempting though but I think this needs a few more quarters to become clear as to how they will handle their "turnaround" and how well McDonalds implements their coffee bar initiative.

Now, in particular, I got REALLY lucky because as the fed dropped rates a few weeks ago and I saw 3 GREENs for 10-MA, MACD, and Stochastics on COH, KMX, and PETS so I bought in. In hindsight, while all worked out well and I got out with 20% on the bounce, when re-evaluating, these stocks weren't anywhere near the 30-MA when I bought in. I'm still holding my position in PETS and from examining the chart, it seems that for small stocks like this that are VERY volatile (lots of 1 day 5%+ jumps) that using TA with weekly charts may be a better idea.

Basically, I'm just taking the R1 TA tools and setting them at a 1 year, weekly data points, and reading them the same way. Backtesting with buying in at 3 greens at 30-MA and selling at 2 red on 10-MA seems that it would catch all the run ups and basically get in out in time while sticking me with a few small losses on false signals here and there (which are annoying and cut into gains, but what do you do..). If I were to use DAILY, I would be in and out once every few days and my online broker would be very happy .

I wanted to know if anyone else uses the weekly analysis for volatile stocks and if so, do you make any adjustments to your TA tools? While I've seen mentions of it here on the board, I haven't found a thread that really focuses on using weekly tools vs. daily tools for stocks.

Thanks!
Adam

[Gunnski]

Hey "ADA",

Just a simple suggestion try:

StockCharts.com - Simply the Web's Best Stock Charts

Click on Chart School (upper middle of the page). Click on Chart Analysis & many of your questions will be answered, in lay person terms & its FREE. They lay out 8 pages of chart set ups re: Daily, Weekly, Monthly, Hourly etc.

Charts are like expert witnesses on the stand. If you put on three different expert witnesses regarding a single subject, high probability you'll get three differnet expert answers.

Same with charts. It is all about interpetation. Find something that works for you & your comfortable with it. Stick with it with focused determination. Don't switch back and forth between MA10 or MA30 Or MA50 or 200 or whatever. Keep it simple, read lots of charts and keep practicing.

I suggest a 2 yr., daily chart and a MA(150). Never buy any stock below the MA(150). This will get you started!

Have clear entry points. Move your stops along the way. Look for chart patterns & use tools for when to sell at least 50% of your position, when the price seems to be getting ready to turn south. Head/Shouder or Double Top patterns etc. Lock in a profit. Do not let small losers turn into BIG LOSERS. Leave the ego at the door please. Get out when the getting out is good.

I recall in the R-1 book I believe Phil indicated using just the tools will not make you any money. I agree with that! You must be able to interpet what is going on & why.

Remember, the tape tells all!