Balti,
That is a pretty good looking chart.
I've got a couple of lessons to share with you and this is a good example to use to make these points
First of all, look at the period from 3rd quarter 2016 to 3rd quarter 2017. The price action is what we love to see. Ted called that "quiet". Notice that when it broke out about 10, it ran up relatively fast. It didn't produce a 200% gain but it did produce a very nice gain of about 150% in only a year. We like to see the volume simultaneously go low and quiet as well, but that doesn't seem to be as important as quiet price action. If you remember, Ted didn't have the volume on his charts and he made his decisions based on price movement alone.
The stock also is paying a dividend. Even though we don't require that the stock be currently paying a dividend when we buy it, a dividend is always a plus.
More recently, that triangle looks pretty good.
Now the bad news.
I2000 and I do not buy ADRs, Warrents, and Funds (exchange traded mutual funds having charts that look like a stock but are not a stock but a group of stocks that may vary over time based on a decisions of the fund manager). There may be more categories like these three that we don't buy but at the moment I am not recalling what they are.
Why do we not buy ADRs? ADRs are nothing but a "wrapper" of a foreign stock. The real stock is listed on a foreign exchange which violates our rule of sticking to American stocks. Many foreign stocks listed in foreign exchanges can have issues that make the purchase of the stock difficult for people in the Americas. To make it easier, there are "depository banks" that buy the foreign stock and then issues ADRs on an American exchange with 1 ADR representing 1 share of the particular foreign stock. That is all well and good but that means when we buy or sell the shares of the ADR, I don't think it necessarily creates a purchase or sale of the foreign stock. In addition, the forces in play on a stock on a foreign exchange are not always the same as those forces acting here. That could cause the stock to behave differently than what we would expect here.
This is just my thoughts on ADRs and I could be wrong, but I feel that I can find plenty of good stocks to buy without jumping into something that I don't truly understand.
WEagle |
