weekend charting 26 /28 nov 2010, page-17

Morning, all.

Continuing on from last week's charting thread, where I asked a question about the stochastic indicator; What is the reasoning behind using 15,5,3 as opposed to 14,3,3 ?
I gave an example about Woodside (WPL) but, unfortunately, was unable to show any pictures due to the fact I had no online files sharing account. Apologises to those who requested them. Agreed that a picture is worth a thousand words.

Now that I think I have it sorted out, I should be able to show you all of what I'm talking about. Let's hope it works ;)



In this chart there are two Stochastic indicators; 14,3,3 and 15,5,3 .
If we look at 15 November, it can be seen that on the 14,3,3 stochastic is showing an up trend and that the %K (blue)line is above the %D (red)line, because prior there were two days of gains.
But if we look at the 15,5,3 , it shows no up trend and the that indicator is firmly staying in the over sold area.

So what I'm asking is that if we go by the 14,3,3, we may having acted pre-maturely in taking a position in WPL.
But if we use the 15,5,3 , we most probably would have not taken a position, as hindsight proved that this week that the stock still had a fair way to go down.
Any thoughts, please ?

Cheers
--Dan

P.S.
Back to the banks. I hear that the NAB has had a computer glitch and that people are unable to get cash from ATMs and EFTPOS. Has also affected other financial institutions.
For me this is good news, as it put further pressure on the banks.
What I'm looking for is a good entry point into CBA. The dividend payout ratio is actually starting to look attractive, when compared to the stocks in general. With less then 3 months to the dividend ex-date (~22 Feb) This stock might start to turn around soon.