Wow! I can't believe I found this site! Hopefully TW's principles won't get too popular! I'm a new TW student, and I have a question regarding CYTO. I bought CYTO at 5 3/4, and it had a real fast rise and drop. Sold on the backside at 9. I was expecting a much slower rise since TW emphasizes monthly charts (I now use weekly charts after purchase). I realize all stocks behave a bit differently, but did I get too greedy expecting it to go a bit more over 20? Or was it just a fast mover and I need to learn from it? Perhaps with the advent of the Internet and how it has changed the way people trade, maybe the insiders are modifying their ways.

I would have sold to. except i would have drawn an uptrend line and sold at about sixteen - seventeen dollars. The trend starts at the price break. draw line from the bottom of the ticks. when the stock reaches some profiting it starts to decline. when the stock price crosses the uptrend line on the way down, that is the signal to sell.This was a fast rise so the sell was okay. On a slow rise that is a differant story.

I bought CYTO at 2.5 and 3.5 about $2000 worth in Oct 99 as per the chart formation. It was a perfect formation at that point. As you may know CYTO hit 20 about a month or so ago. I sold at 17 for a profit before commission and fees of about $9000. Here is the best exit stratagy in the world today! After a rise as in the case of the above mentioned stock;(or any stock) anytime your "markup" phase encounters a 45 degree angle drop (on the chart) do not ask questions do not hope for better days, do not pray you are to immediately exit your position. As an extra added confirmational guideline; also if there is at the same time of the 45 degree angle drop - an doubling of average daily volume that accompanies the 45 degrees you are to exit immediately!

Thanks for the info. For this exit strategy, are you looking at daily charts? Ken

Yes, daily charts do assist with the monitoring of this type of price development phenomena. However, ANYTIME you have a 10% drop in price at twice the average volume in a single day, you must think about capital preservation. That is your exit stratagy. At this point of the development of the price of the stock the chart is secondary, you must exit, because this is most likely a change in price development trend. Usually if you have this type of drop in a day the chart is going to confirm the change in trend over the next few days or weeks. Because if you got in at the base and accumulation phase the markup is (as TW says) going to be 200-400%. After this amount of rise, the 10% twice the volume rule is the natural sequence of events. In otherwords it is most likely that the markdown phase has begun.