Its even more interesting to study the indexes for the semi, computer, softwre, semi equipment, etc. using technical analysis tools. Anyone serious about investing in high tech or other volotile stocks should make it a standard operating procedure to look at the chart for the sector(s) the stock is in and ones related to it. You could see the tech sectors heading down over the past several trading sessions last week but coming short of the bottoms of most indicators. Oftentimes you get a "despiration blow-off" when a stock or market is near this point. I think the chart tracts the psychology of investors still in the stock(s) at that point. While many investors are sitting on the sidelines or otherwise disinterested, a portion of those who have held on have grown increasingly frustrated. This type of investor takes it VERY personally - he has wanted to "get back to even" so he can just "get out of this dog" he was convinced earlier would suddenly shoot up to satify his fantasies, (new girl friend (if married, wife can watch the kids), yatch, beachfront property in Costa Rica, etc.), so when the stock/market has gone down past his "breaking point", he bails out in panic, sending the stock spiraling downward precipitously, right into the waiting hands of a more savy investor. This kind of action shows up on the charts as a punch through the bollinger bands, a reverse shooting star on the candlesticks or swift reversal move in one the other indicators.
The charts are realy looking exciting at this point. Billions were made or given up yesterday and today. I wish we had a holliday tommorow to have enough time to better plan some heavy trading. |
