High performance bullish support lines

Use on high risk, speculative stocks
Slope is 50% steeper than 45 degree bullish support line

Example 1

The high performance bullish support line rises at a rate 50% faster than the 45-degree bullish support line. The steeper slope is used to require a higher measure of excess return to compensate for stocks with higher volatility (i.e. risk).

Example 2

CSCO has been one of the best performers in the recent bull market. This chart shows the effects of a stock split in reducing the historic volatility of a relative strength chart. As the stock fluctuated before the stock split the volatility was much greater on these charts than the current chart depicts. It is a function of scaling.

By W. Clay Allen CFA

Next: High performance bullish support lines - example 3 - 4

Summary: Index