For BobCharts on any stock, --- Click Here ---

The CNBC effect is simply the upward movement of a stock's price when it begins to get positive publicity on CNBC. You can take advantage of the CNBC effect using simple trend lines and charts like the one shown below.

These Support Line Touch charts are published on the web right after the market closes every day. You can scroll through TodaysCharts.com's daily Support Line Touch scan results and see dozens of current charts just like this any time.

Applying the CNBC Effect

As the developer of the Ramp Trend Line Scan Program, I spent many months testing the program’s support line scan routines. I saw all stocks that touched long-term support lines every day. I began to notice that stocks tend to hit their support lines in industry groups or sectors. As an example, when MRK was touching a major long-term support line, it just so happened that PFE and other large cap drug stocks would be found in the scan the same day. I started to pay attention to what type of stocks were on support lines each day and I saw that entire sectors would very consistently touch support lines simultaneously. This in itself is an excellent trading tool.

At the time, I was somewhat of a CNBC addict and had it on my TV for several hours each day. After running the Ramp Trend Line Scan, I would note the sectors for the stocks that I saw on support. Then I would watch for CNBC to announce the sectors that money was rotating into. I found it usually took about three trading days for the bounce off support to catch the attention of the media.

I have shown this to several friends. We now call it the CNBC effect. If you want to see this for yourself, you can easily scroll through the sectors and the stocks on support each day at TodaysCharts.com and watch for several major stocks and a sector to touch support on the same day. At this writting (Nov. 22, 2003) the "Major Oil and Gas" sector is on support and so are the leading stocks XOM and BP. A rally should follow in a few days. It only takes a few minutes to find these each day.

The last but very important step is to look at the BobChart for each stock so that you know going in exactly where support and resistance for your stock is.

Andy Skinner
andy@nebadawn.com