LONG post/explanation on what a weekly buy signal..
i think it's very important to understand what a weekly buy signal means:
1) A weekly buy signal signifies the long-term outlook is bullish.
2) Once a weekly buy trigger is seen you have 2 things you need to do:
a) Switch to daily view and see if the RALLY has occured? you would figure, that sometimes a rally would have ensued and then this rally would have triggered my weekly buy signal.. that means, it would not be wise to enter right away. wait for a pullback and then enter..
b) Sometimes, the weekly signal would be triggered before a rally.. MU is a great example. MU buy signal was triggerd during late december. However, it didn't rally until weeks later..
3) It also depends on what kind of trader are you? if you're short-term trading, then yes, your daily chart would be MORE important than your weekly..
If your buying for your long-term portfolio, then weekly would be more important and not try to fight for the OPTIMAL entry point.. It would be nice, but dont pull your hair out <ggg>
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RISKS:
one more thing, I am now classifying my picks under different conditions:
1) A WATCH - that means it's close to a weekly buy signal. but that signal has not been triggered. I've seen stocks where it seemed like the weekly signal would be triggered but at the LAST moment, it dies..
So, going into a trade before a weekly buy signal is "higher risk" but more reward for catching the rally (if it comes) early..
part of the risk/reward relationship you see everywhere.
Want to see an example? Compaq.. recently..
2) A WEEKLY SIGNAL BUY - that means, the weekly buy signal is actually trigger.. go to daily chart and play accordingly. the least risky.
3) WEEKLY SIGNAL SELL -- that means, XYZ will not go up.. More risk to the downside (but doesn't have to move down)... just means, your longer term view is down or flat.. |
