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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: StockOperator who wrote (39774)	2/12/2000 6:21:00 PM
From: danderso	Respond to of 99985

SO, thanks for taking the time to reply. I guess I have to read more about TA. The basis of my question is the word "mistake." To the degree that investors bid up a stock on an incorrect fundamental premise ( in the case of ADSP, CNBC kept erroneously announcing that ADSP had a new wireless product ), the high stock price is unwarranted. Yet it seems that a stock will have a tendency to move toward that price after a correction simply because it spent some time there. A stock may rest at 50% higher than the price prior to the mistake and bounce up even further from there even when the mistake on fundamentals is widely known. This is the part I don't get. BTW, I agree that it's highly unlike to revisit the 50s, but if it does I'll short first and look at fundamentals later. I probably shouldn't bring these junior league questions to this forum any more.