I have a question on using the 20-day moving average vs. the 50-day average. You almost never seem to discuss 50d as a selling guide or add/entry points like Bill. Is there a specific reason for that?

A:

I always enjoy hearing from folks who have followed me for such a long time. I think the 50-day line is a fine place to exit a holding and I sometimes use it to sell the last piece of a position. It can obviously keep you in a big winner longer than the 20.

Some people like the 65-day moving average, which they believe offers support, but I have never seen the advantage of that. The 50 has the advantage of being a known area where institutions will add to a position. If price pierces that line, no matter how light or heavy the volume, and does not reverse within two or three days, it speaks of weak large-investor interest at a point which you would normally see it materialize.