Ahhhhh yes, but you are right about BCRX not having anything to do with any other sector. Neither does the price of tea in China have anything to do with the Internet or Telecom industries, but I bet that if you charted the price of Chinese tea on a daily basis, then you would get the same type of patterns that exist in stocks.
It seems that markets are markets, regardless of the underlying commodity or security. And when markets are charted, you will be able to identify the same patterns in all of them. Higher highs and the trend is upward. Lower lows and the trend is downward. A spike with no follow through (i.e. ETEL) and look out below for the next level of support, which in this case happens to be 4 1/4 (check the chart for the most recent spikes in price in July and August).
I don't know if any of this rambling of mine will be of any value to you in your trading, but after more than a dozen years as a stockbroker, I have heard so many "stories" from managements, sales managers, other brokers, clients, etc. that never amounted to anything, that I began to rely upon the "truth" that can only be found in the charts. When people speak with their money, then it shows up as increased volume and prices, and that is clearly evident in the chart. This avoids all of the "he said, she said" bunk.
The chart shows decreasing price and daily volume on ETEL, which is all the "story" that I need to hear. If the stock's volume increased on Monday and took the stock to new highs, then I would look to cover my short, and even consider going long. However, past experience tells me 4 1/4...trading bounce back up...then down to close the gap to 3. After that, it all depends on whether the company can deliver results on a quarterly basis. Up to now, just losses and hype. Love to see them, and any American company ,have great success. But until then, you will find me in Missouri huddled over my charts and leading a boring, hypeless (but profitable!) existence.
Now my trading is much simpler, easier, and much more successful than it has ever been. Hope this gives you some perspective on where I am coming from when I reference the chart of a company in a completely different industry.
Good Trading |
