I'm know the Fibonacci method, but I think it is better used in the analysis of bonds and commodities. The technical methods I usually use for stocks are: Trend lines, 50&200 Day Moving Averages, triangle patterns, and formations like double bottoms and such, in order to guess where the stock is likely to go. Most of all, I use a kind of pattern recognition technique, where I can just look at a price vs. time chart (with no indicators or anything), and tell where the stock is probably going. It's too hard for to articulate how I do this, however.
With momentum stocks, after the inital runup, it is impossible to tell where the pullback will take the stock (in most, but not all cases). This is because the prices are too emotionally and psychologically driven. Once the stock begins to rally again, its first peak will represent both minor resistance (which it will probably break), but major support. If, during the second rally, the stock does indeed break through the first peak (this minor resistance level), then the stock will continue higher. Afterwhich, it will pull back to the first peak (now, a major support level), and then rally again. This cycle keeps repeating itself until the stock finally fails to take out the previous rally's high. |
