What Joe means by "soft shareholders", a/k/a "weak hands" are shareholders, many-times smaller individuals, but not always, who have no faith in their investment choices.
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These "type" of stockholders tend to watch the trend closely and bail out on any move NORTH, and ESPECIALLY when a stock moves back up to their INITIAL COST level.
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This causes an "overhang" on the Market, as as soon as we get NEW BLOOD interested, down the road, these weak hands UNLOAD immediately and therefore STOP THE MOMENTUM - COLD.
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The only way to get sustained momentum going NORTH, is to clear out the weak holders. The sooner the better. A technical bottom is evidenced many times by a "blow out" sell at a significant LOW on HEAVY volume. This signifies the last of the weak holders, giving up the ghost.
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Once they are gone, the "stronger hands" can support the stock price, and the New Blood, will rally the stock higher.
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Colin |
