It is hard to look the other way when most people are looking to buy , buy more and keep on buying. This is the time when you seriously want to look the other way.
If you study the different types of stocks, you would know that it is the Technology stocks that are driving the stock market.
In this chart, I want to illustrate two points :
1. The price action has deviated far from the 200 EMA , in a way you can say it is overbought.
2. The pink line (bullish trend line) also shows the price action is far (though not as far as 200EMA) away from it
Now, we know that price moves in waves format so after an impulse move, a correction wave must come.
It is tough to predict how far it goes up (from trend line or 200EMA) before it corrects.
Look at Alibaba shares in 14 Jan 2020 where it moves far away from the trend line and 200EMA and it corrects shortly........
The past historical price action serve as a guide. Be prepared.......
If you study the different types of stocks, you would know that it is the Technology stocks that are driving the stock market.
In this chart, I want to illustrate two points :
1. The price action has deviated far from the 200 EMA , in a way you can say it is overbought.
2. The pink line (bullish trend line) also shows the price action is far (though not as far as 200EMA) away from it
Now, we know that price moves in waves format so after an impulse move, a correction wave must come.
It is tough to predict how far it goes up (from trend line or 200EMA) before it corrects.
Look at Alibaba shares in 14 Jan 2020 where it moves far away from the trend line and 200EMA and it corrects shortly........
The past historical price action serve as a guide. Be prepared.......
Comment:
can this be the start of a correction ?
Comment:
You can see both stocks are retreating back to the bullish trend line as part of the correction process
The signs are there, owner selling at peak...