Kyle,
The most reliable way to read the charts is retroactively. Wait until the stock moves, than display the chart and say: "Of course it was going to move that way, because of the inverted head and shoulder formation became correlated with the first derivative of the 50 day moving average."
If you actually want to predict the future, it becomes more tricky. But usually, the prediction is that if the stock moves up, it has a potential to move up even further and break through some resistance.
If that doesn't happen, than 1 of 2 things will happen: it will find a new trading range, or it will move back to it's original price.
If the stock goes down, than it will probably stabilize at some support level. If that support level doesn't hold, it will move further down.
If neither of these happen (suppors holds, support is broken), typically what happens is that the stock goes up. <g>
Joe |
