Flue - U R pessimistic. LOL.
Time frames: I have observed that the rally breakouts usually have the same time span than the move between the fist H-L of the figure.
If bullish flag, height of the mast, time span 6 months
If triangle, first H-L, time span 2 months.
I can be wrong.
"I luv all time highs"
Not always.
This has prooven good short-term tactic in my port.
But these position stay under close scrutiny.
Buying all-time high have a prime advantage: there is no resistance ahead.
When, above this, the share is priced at lower multiples than the competition, you can expect the rally to continue.
I am still long SUNW with a first target at $150 based on P/S R.
At all time highs,there always is a possibility that it reaches a quote at which the management would decide to split the share, giving an extra boost. (worked with GLW and SUNW).
When the broader market starts to rally, the strongest shares usually are those that rally at first.
At the highs, some shares have steep upward ranges, clearly recognizable. and as nothing goes up forever (need to consolidate, some profit taking, or a share that has run above fair value), a breach of the channel is a clear sell signal. (sold my ADCT, KEI and MRVC that way).
I would not buy at high if:
- the chart is halfway of possible H&S
- if the price is at target of a triangle or flag
- if the sector is underperforming
- if I don't like the share
- if the broader market alreday is rallying. As a matter of fact, when the broader market starts rallying it is time to take profits. And look for the second and third tiers to follow, as the first tiers get overpriced.
I can't call bottoms. If I find some good turnaround candidates, I usually am not patient enough to wait for the market to give me right. Regularly miss the train by selling before the rally. |
