Ask Colin

TREND

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  1. Could you give an example of your analysis of peaks and troughs?
  2. How do you determine what is a peak and a trough?
  3. How do I identify the peaks and troughs in price that are relevant to me as an investor?
  4. How do you analyse the trend in the AGL chart at the start of June 2003?
  5. What is the meaning of the trap you mention of investing medium to long term and monitoring the market short term?
  6. Aren't peaks and troughs quite subjective?
  7. I have trouble identifying what troughs are significant in an uptrend when setting my stop-loss levels. Can you help?
  8. Is it correct that the Coppock Indicator is another form of a Momentum Oscillator which is used to detect trends?
  9. The problem of differentiating between a new bull market and a bull phase of an existing bull market can apply to any market: When a stock, index or commodity has a bull market then a bear market then another "bull" market, but with a much shallower trend than the first bull market, can that new "bull" market be regarded as a true bull market when although it makes higher peaks and higher troughs, the trend line drawn through the troughs is invalid because it penetrates price bars if extended backward in time?
  10. Having become a convert to your use of trend lines to follow stocks, I have been tracking things on a DAILY basis - then I figured maybe this was too short a time interval? What is a reasonable time interval to look at trends?
  11. In your article in the September 2001 issue of Shares Magazine you illustrate several wonderful examples of charts that have trended strongly over long periods. In some of these, however, the trend line at a point in time would have been broken. Each of these then continued onward and upward but, would you have sold out about the time the trend line was broken and bought back again later as they resumed trending ? If not, ie you would have stayed put, how does one know that the price reversal below the trend line will not continue downward and wipe out your profits?
  12. I have a query arising from the Shares Magazine September 2001 issue. When you speak of a Basic Uptrend such as in the diagram on page 76, over what length of time is the best measure? - 6mths, 1yr, 2yrs? - You haven't put a time limit on the diagram. For example, do you only look for a Basic Uptrend in a company that has been trading for over 5 years or so?
  13. I read in Shares magazine this month (April 2001) your explanation that the All Ordinaries Index is in a trading range and, therefore, still technically in an uptrend. My recollection from what you taught me in your courses where Dow Theory was explained seems to lead me to a different view. It seems to me that the dominant peaks and troughs would indicate a downtrend, albeit still gentle.
  14. In determining the break in an uptrend, should I use a 5% stop, or daily/weekly moving average cross over?