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ProSticks Articles
Hong Kong Economic Time --- 29 June, 2000
Modal Point Filtering
In today's article, we will briefly illustrate two important Modal Point filtering techniques:
- When two or more bars contain Modal Points with the same price, that
Modal price is important.
- The Modal Point of the bar that started a trend is important.
The figure shows the ProSticks chart of Culturecom Holdings (0343). Notice
that the Modal Point of A posed as a support when the price fell around
B. But how can we tell beforehand that the Modal Point of A
is important?
There are two reasons why it is important. First, notice that both the Modal
Points of A and C occur at roughly the same price, signifying consistent
buying pressure at that price level. Secondly, notice that A is
the bar which started the uptrend from 1.00 to 1.40 in May. Thus, A
signified the beginning of an inflow of cash and acted as a strong support when the price
retested this level a month later.
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