Thanks for the question. I got the 49.76 from the high of the 8/1/06 “Very High Volume” up bar. It was within pennies of the 7/3/06 top of 49.83, and I give it more weight than that one because of the volume and the fact that it is more recent.

Some folks would use the next day’s high (8/2/06, 51.27) as a breakout point, but to me that day was simply the failure of 49.76 to hold and follow through. Notice how the subsequent 12 bars after the failure all fell *within* the range of that one “big one”. Support near its bottom, resistance near its top. Also huge “volume at price” — shares traded between about 47.00 and 49.50 over that two weeks or so. That one bar marked the line in the sand. I saw the break of its top yesterday (8/21) as the resistance giving way. Now only to wait and see if this break holds…

(I’m not extremely persnickety about the precise level… a nice round 50.00 entry would have been fine, since so many people focus on the $5 intervals. I just felt that if 49.76 fell, 50 would follow in short order, and I “need them 24 pennies!”)

Oh, and time frame– For the trades I take based on daily bars, I mainly trade off of 1-month and 2-month charts. Actually, I’d say I use about 20-60 bars back for every time frame, i.e. I may just be looking back an hour if using 1-minute bars on a really fast daytrade, or over a year if taking a longer position based on weekly bars.

Thanks for visiting!

Ken