Hi Ward. You said:The breakdown in PYT is simply an event with a high probability based on its trading behaviour. Regardless of what your fundamental reasoning for the drop is, i.e. "lack of an appropriate news release", how can you possibly invalidate TA based on fundamental reasoning?
I do not invalidate TA based on fundamental reasoning. Unlike yourself, I believe they can be used collectively to better determine direction. The point you fail to understand, IMO, is that penny stocks go thru a number of phases in their "junior" years. TA is of little use to determine direction, when at best stock price is illogical. Stocks are "manipulated" to show artificial demand, news releases are pumped, stocks conveniently close at daily highs regularily. All these influences foul up a good TA determination. So fundamentals of the stock must be appreciated and considered.
Case and point, Donner minerals. SVB stocks tanked this week, because of rumour. TA didn't forecast it, fundamentals didn't see it but it happened. These sorts of things donot occur to mid and highmarket cap stocks (regularily) where TA is invaluable.
So my approach is to adjust to the stock group and not the stock. If the fundamentals are good then the stock will survive. This of course does not prevent me from daytrading some of the stock to buy myself down. So you fully appreciate what I am saying, while you wait for the "inevitable fall to $2.75" my cost per share has dropped below that, as a result of using "fundamentals"!!
Consider the number of times this stock has fallen to approx. $4.00 and the number of times it has reached $5.00, If you caught half of them you would own your shares free. Stick to TA only and I can almost guarantee you the stock will swing about $5 bucks worth before you ever see $2.75. By that time I will be working on free shares
the Chief |
