Price action tells you a lot about the timing to go long or short. Some traders got it fairly accurately, able to catch the bottom or top while others still find it illusionary and mysterious.
Now, let's say you have done your research and are keen to buy this stock.
By looking closely at the chart, it tells us several things :
1. Price has come to some sort of a standstill since early June
2. It stays sideway for a while before attempting to break out of the resistance at 436.98 on 31 July 2020.
3. It failed and tumbled down until 31 August 2020.
4. On 1st Sept, 17th Sep & 7th Oct - it tried to break out again but both attempts were failure.
5. Now, we are at the bullish trend line and within this week, it will attempt once more to break the resistance level. If it cleared the 436.98 level, it might face another challenge at 450.47. This critical level must be broken up before we can consider it to go even higher.
6. Failure to do so, we can safely expect the price to tumble to 400 level. There, we have to wait and see if it gains any support. If not, the next level will be 346.52.
With this basic information, if you want to long this counter, does it not tell you to be patient and put it in the watch list first ? We want to buy low, like 346.52 or 400 compared to current price and the only way to get at that price is to WAIT. Being patient is a virtue in investing and one must learn to cultivate that.
However, there is a difference between being patient and being a procrastinator. The latter appears to be patient on the surface but in reality, he finds excuses why he should not go long. He has too many "What ifs" on his mind and choose to wait to see the outcome first. He needs assurance and safety but his commitment to action is minimal at best. He kept waiting , believing given time, he will have more resources, better equipped , blah blah blah to make his decisions. In actual fact, he did not take any action other than inaction.
Analysis paralysis in any facets of our lives serve us no purpose. There are always fresh information that can affect the price , the company's revenue or a new competitor ,etc. We can't have COMPLETE information on hand before making a decision. We deal with what we have on hand and make a projection , based on past historical patterns and data provided.
The outcome will tell us what is the probability of us being right or wrong OVER TIME.
Now, let's say you have done your research and are keen to buy this stock.
By looking closely at the chart, it tells us several things :
1. Price has come to some sort of a standstill since early June
2. It stays sideway for a while before attempting to break out of the resistance at 436.98 on 31 July 2020.
3. It failed and tumbled down until 31 August 2020.
4. On 1st Sept, 17th Sep & 7th Oct - it tried to break out again but both attempts were failure.
5. Now, we are at the bullish trend line and within this week, it will attempt once more to break the resistance level. If it cleared the 436.98 level, it might face another challenge at 450.47. This critical level must be broken up before we can consider it to go even higher.
6. Failure to do so, we can safely expect the price to tumble to 400 level. There, we have to wait and see if it gains any support. If not, the next level will be 346.52.
With this basic information, if you want to long this counter, does it not tell you to be patient and put it in the watch list first ? We want to buy low, like 346.52 or 400 compared to current price and the only way to get at that price is to WAIT. Being patient is a virtue in investing and one must learn to cultivate that.
However, there is a difference between being patient and being a procrastinator. The latter appears to be patient on the surface but in reality, he finds excuses why he should not go long. He has too many "What ifs" on his mind and choose to wait to see the outcome first. He needs assurance and safety but his commitment to action is minimal at best. He kept waiting , believing given time, he will have more resources, better equipped , blah blah blah to make his decisions. In actual fact, he did not take any action other than inaction.
Analysis paralysis in any facets of our lives serve us no purpose. There are always fresh information that can affect the price , the company's revenue or a new competitor ,etc. We can't have COMPLETE information on hand before making a decision. We deal with what we have on hand and make a projection , based on past historical patterns and data provided.
The outcome will tell us what is the probability of us being right or wrong OVER TIME.
Comment:
at current price, there seems to be a support. If it breaks, then it might revisit 327
Comment:
congrats to those who shorted this stock !