Firstly, I want to acknowledge the assistance given me by @Orwell, a very knowledgeable and respected poster from the XSO thread. What I'm sharing with you is my understanding of what he shared with me.
I use Fib retracements or Projections in two ways:
1- Starting with the Monthly charts, when you see a stock that is Fundamentally sound, and has retraced to the 61.8% level at least, or perhaps even lower than the 76.4% level; and
2- starts to Base, or go through the Accumulation phase; and
3- in Jako's words, "there is an ease of upward movement"; and
4 - to use a bit of Wyckoff - there is a Breakout from this zone - you know the odds are in your favor.
The next question is, how far Up is the stock going to go?
5- You use the Fib, starting from the Top (ignore wicks) and then moving the cursor Down and to the Right; and
6- you get a Projection for the Price to go to, which is around the 61.8 to the 76.4% before a serious pullback. e.g. MND, a stock well known to this thread as it was recommended by Jako.
That's how I based my initial projections on MYX, TRY, FLX
7- Breakouts from a strong trend, not too long in the teeth, and where the breakout is around 12 months and Horizontal often leads to the Price doubling in a very short period of time
8 - Pullbacks or Retracements - if you use the Fib, starting from the Bottom (always ignore wicks) and then Up and to the Left to the Top (please see BGA), you get the 161.8% Extension and this is a level which the Price normally gets to within a reasonable amount of time, say 4 to 9 months and the Profit margin is around the 20% to 30%, sometimes more.
It does not always pan out that way but hey, what does? However, if you sticks to Fundamentally sound stocks, in growing sectors (ignore Media, retail-not suppliers but actual retails e.g. Myer, financials, real estate trusts - not suppliers like BLD, insurance, investment groups and Education) these are yield sectors, not growth.
Then if you use Good Money Mgt and Discipline (commonsense) le voila, you should be ok son.
Off to another nice cruise next week - this time around Cuba ("Sirena"). Have to share an interesting story with you guys. I first cruised on this ship when it was called Tahitian Princess and did the Tahiti Islands round; more recently we did a cruise on it under the banner of Ocean Princess; recently it was sold to the Oceania group and renamed "Sirena", or Mermaid for you British sailors.
From there we'll be going to Madrid and Portugal to see the family. So I'll leave the charts in the good hands of Farmlife, Melenova, Cabbie and the rest of the crew.
