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Strategies & Market Trends : Turnarund Investing

NOVS 0.0666

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Aug 1 5:00 PM EST

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To: grahamcracker who wrote (944)	5/1/2012 8:34:52 PM
From: Covenant	1 Recommendation of 1876

Technical indicators are very much influenced by momentum. The path of least resistance is the direction something is going, inertia. Stocks overshoot both on tops and bottoms. When I'm making a play against the momentum, I want the momentum to be changing in my favor. I don't want to buy something dropping like a rock until it stops dropping. Likewise, I don't want to short something that is going up, up, up. Just because something is overvalued doesn't mean it wont get more overvalued. Waiting for the price to stop moving against your intended position is prudent. I'm not going to short a 100% buy no matter how overvalued it may be. The best traders tend to be momentum players. I'm not a momentum player, nor do I intend to become one. But that doesn't mean that I'm going to fight the tape.

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