CHAPTER 10 ?– BUILDING A SAMPLE APPLICATION USING ASP.NET AJAX 241
Figure 10-11. The 100-day price history for MSFT
Figure 10-12. The 100-day price history for SBUX
CHAPTER 10 ?– BUILDING A SAMPLE APPLICATION USING ASP.NET AJAX 242
These charts are useful in determining where a stock is going, its recent trends, and
its long-time trends. Many stocks move between high values and low values in what
sometimes looks like a sine wave; this is typically called its trading envelope. This is
apparent in Figure 10-11, which shows a cycle from 26 to 28 indicating that March 2007
had been a good point to purchase the stock on a short-term basis because it is at the
lower end of the trading envelope. This is no guarantee that the stock will not break from
the trading envelope and fall far below 26. Also, typically when a stock breaks from its
trading envelope, it tends to move quickly outside the trading range, which can lead to
the stock rocketing either upward or downward. A more reliable methodology for using
price history analysis is to use the Bollinger band method, which you??™ll see a bit later.
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