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Strategies & Market Trends : $10 and Under : New 52 Week Highs -- Ignore unavailable to you. Want to Upgrade?

To: The Ox who wrote (466)	10/15/2007 9:54:43 AM
From: bruwin	Read Replies (2) \| Respond to of 557

Hi there TO. Good to cross paths with you again !! Yes, I’d certainly go along with a "friendly trend". No problem there ! Before I go further, let me put the following "into print" ... (i) Folk are free to go with whatever strategy they believe in, and what suits them. (ii) I’m not out to impose my own outlook on anybody. Having got that out of the way, here’s my own take on trends ... IMO, a trend is the end result of the interaction between buyers and sellers, because the data behind the chart plot comes from PRICE, TIME and/or VOLUME. And, quite obviously, there’s nothing within that data that tells one anything about the Financial Fundamentals of a company. So, speaking for myself, if there’s a good price uptrend underway, I’d like to know that there’s something within the Operations, Profitability, et al, of that company that can support that trend direction, and that one is not relying, solely, on the "Efficient Market Theory". I’ve seen far too many charts that showed very positive T.A. indicators which eventually came to nothing because the Financials of those companies were next to worthless. A good example was AHFI back in Oct./Nov. ’04 when its price went from $1 to $5 in 2 or 3 months, accompanied by "positive indicators". Needless to say, those who "got on, and off, the bus" at the appropriate time did well. But there were certainly many others who ignored the complete lack of AHFI’s Fundamentals, who relied entirely on the charts, and ended up paying an expensive price for that junk. I therefore believe that there’s much good advice in O’Neil’s writings, which indicate that folk should first interrogate a company’s Fundamentals, and when those are suitably attractive, one can then take a view on their chart in an attempt to see how "the Market" is reacting to that stock. But to do it the other way around, and rely almost entirely on the charts, is, IMO, to add probable unnecessary risk to one’s purchase. ~protégé stated "Don't try to comprehend it, just go with the flow". Well ... couldn’t that possibly be equated with what lemmings sometimes do, and look where that gets them ! (:-) I suggest that there certainly are specific areas within a company’s Financial Statements that will give one very good indication as to its current ability to be profitable, and to provide shareholder value. Something that is relatively straight forward to comprehend. One may not necessarily know what is the "game plan" of the Directors, but at the end of the day, it’s the verifiable financial end result(s) that count. Until next time, best wishes with your investments !!