Food For Thought

Technical analysis is tricky-- and my friends say "too much analysis leads to paralysis".
Frost & Prechter's EW Principle makes a passing reference to keeping a record of "Hourly close chart" while discussing charting the waves--see page 70.
I for one,donot rely on Hourly close values and use high-low values only for my labels---majorly so because the intra-day 5 min charts on the basis of closing values would be very difficult to analyse & infer from.

However,while analysing individual stocks,particularly near their intermediate lows and highs when usually a diagonal is occurring,I have found Hourly closing values getting adhered to.

To make it specific, on Friday dt. 8.6.12 I was having a look at SBI counts and came to following conclusion:

Following the principle of sw1>sw3>sw5 ,it should not have gone above 2203.But it went above 2203(upto 2217.5) before retreating.

And then I used Houly closing values:

And here I found the diagonal to be doing sw1<sw3<sw5 and so it got justified.

PS:

Intention was to emphasise the importance of closing price perspective also--- and not to discuss SBI counts.

:-)

Raghu