|Tiger Path #3 - How To Make 25% A Year - (C) 2006
William Schmidt, Ph.D.
Buy The Highest Accumulation Stocks At Price Support
and Sell Them At Resistance or Let Stock Run if Breakout
Price Support means one of the following:
At a rising line going through 3 or more bottoms. This is considered "well-tested".
At the previous minor low. Use this only with High Accumulation stocks
At a rising (red) 21-day mvg.avg.
At a rising (blue) 50-day mvg. avg.
At a rising (pink) 30-week (149-day) mvg. avg.
At a rising (black) 200-day mvg avg. (On weekly charts use 40 wk ma)
When a stock shows a pattern of high accumululation, it is very likely that it will bounce up
from one of these price support point and then challenge its overhead price resistance.
Price resistance occurs most often either at levels where previous rallies were turned back
or at the upper bands that Tiger charts produce automatically. XOM and EBAY, shown below,
both were the hightest Accumulation stocks in the DJI-30 and NASDAQ-100, respectively.
Many times the price support will be a nested set of different moving average lengths
and/or at a price support line going thru several bottoms. This offers even more support.
In the chart below we would have bought GE on tests of prior lows as long as the
stock shows high Accumulation and is blue positive territory. Instead of rigidly deciding
to sell at the resistance of the previous peak, give the stock a day or two to breakout and
start a run. The red automatic Buy signals that occurred at the same time served as
There is more judgement required here as the automatic Buys and Sells cannot take into account all
that our eyes can. In addition, the profits are not computed automatically. Nevertheless, this is in
many ways the most profitable type of trading because of how many such potential Buy-at-Support
points there were when looking at even a handful of the highest Accumulation stocks.
There are two risks. Support can fail. In this case, taking a quick small loss is preferable to seeing
a loss get bigger and biger. The other risk is that prices will not stop at the expected Resistance level
and will just keep going up. The solution for this is to also use Tiger Path#4 and Buy on appropriate
Most stocks that have very high Accumulation will show periods of horizontal movement. In these
periods simply buying at the previous lows works wells. Look at the charts here.
Tiger's software easily finds for you automatically the highest Accumulation stocks at support
and also those making new highs. (This requires the TigerSoft graphing program ($295) and the
Tiger-Power-Stock-Ranker ($295) Or you can leave it all up to us. We will find such stocks
for you each night for $575/year and post them on the internet for you, along with an explanation
of each recommended trade. You can get all the Tiger and Peerless software, all updates for a
year, all our books and a year's subscription to the Hotline Services for $995.
|Look at Horizontal Support Buys Here. Selling is done at the recent