Jim, I have friends that come up to me and say "if the company gets hit by a flood and go to pieces, will TA predict that?" and the answer is no. TA does not predict natural disasters. Let me tell what TA predicts. Let us call an insider someone like a V.P. at a company, a Director, President, or any institution that has insider information. If a V.P. knows of coming project and good news that will push the stock prices up significantly then guess what? He/she is going to buy the stock. The same is true of institutions. They have inside knowledge that you don't know yet like what the Earnings are going to be like for CPQ or DELL. However, I bet that many will agree with me that insiders know the scoop. As a result, insiders and institution will buy large number of shares in anticipation of making money when the news become public.
TA detects institutional buying. I don't have to know the exact inside story that an institution knows in order to ride the stock.
When institutions start buying the stock then it will form a technical picture like the Pennant with CPQ as an example. If institutions know of a bad story then they will start selling their shares and I will detect that on the chart like the Upside Wedge on DELL. The chart
tells it all. it is that simple. While you are waiting for the bad
news to tell why you are holding DELL at 40 after it was around 80, I would have been out along with institutions long time ago.
Good trading,
Christopher |
