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Posted On: 03/10/2021 8:55:43 PM
Post# of 148903
Will share what I've learned over several decades of both self-capitalized trading + institutional trading. The adage is that technicals work until they don't.
When they work, it's usually because:
-They represent a visual manifestation of market participants intentions (i.e. Support & resistance, uptrends, etc. - all show areas where the participant(s) think a stock is under or overvalued in whatever time horizon)
-Self-fulfilling - if everyone thinks something should work, then it does. Hence why the Fed cares more about inflation expectations than inflation itself these days. It's also why the very obscure, complicated technicals are likely less successful than the simple ones...more people are adhering to the simple ones...majority rules
When they don't work, it's usually because:
-Fundamentals outweigh the technicals
-The participant(s) in that particular stock aren't technical followers
-The participant(s) have an agenda that has nothing to do with fundamentals OR technicals (i.e. Divorce so selling all their shares, 10 year time horizon so price sensitivity in short term is irrelevant - i.e. Ok to rip a stock from $2 to $3 to get liquidity quickly if you think the stock is going to $100 in 10 years)
So...the technicals work....until they don't. The reason why most people don't succeed at retail trading is because they let their emotions override reality.
I've tried to apply technicals to this stock in the past (for fun, not to trade it, I'm one of those 10 year time horizon guys), it really doesn't work very well in this name. It's a volatile biotech on the OTC...it's all about the catalysts & funding. It rallies when there's hope around the corner, it plummets when that hope is dashed. We all know that short term uncertainty went up a lot recently...as the uncertainty is peeled back, and things look good, the price will move higher.
As trial enrollment (& protocol approval) is expedited in the new critical and/or long hauler and/or NASH, or if any sort of revenue comes in, or if the HIV BLA shows tangible progress, or there is a Covid 4th wave, or news of variants infecting vaccinated people, or trial partnerships are announced, etc..., the stock will recover. I anticipate that all will happen at various points this year, including an EUA and/or full approval.
Much like Cdiddy, think I'm backing away for a while until some of the catalysts occur. Be well y'all.
When they work, it's usually because:
-They represent a visual manifestation of market participants intentions (i.e. Support & resistance, uptrends, etc. - all show areas where the participant(s) think a stock is under or overvalued in whatever time horizon)
-Self-fulfilling - if everyone thinks something should work, then it does. Hence why the Fed cares more about inflation expectations than inflation itself these days. It's also why the very obscure, complicated technicals are likely less successful than the simple ones...more people are adhering to the simple ones...majority rules
When they don't work, it's usually because:
-Fundamentals outweigh the technicals
-The participant(s) in that particular stock aren't technical followers
-The participant(s) have an agenda that has nothing to do with fundamentals OR technicals (i.e. Divorce so selling all their shares, 10 year time horizon so price sensitivity in short term is irrelevant - i.e. Ok to rip a stock from $2 to $3 to get liquidity quickly if you think the stock is going to $100 in 10 years)
So...the technicals work....until they don't. The reason why most people don't succeed at retail trading is because they let their emotions override reality.
I've tried to apply technicals to this stock in the past (for fun, not to trade it, I'm one of those 10 year time horizon guys), it really doesn't work very well in this name. It's a volatile biotech on the OTC...it's all about the catalysts & funding. It rallies when there's hope around the corner, it plummets when that hope is dashed. We all know that short term uncertainty went up a lot recently...as the uncertainty is peeled back, and things look good, the price will move higher.
As trial enrollment (& protocol approval) is expedited in the new critical and/or long hauler and/or NASH, or if any sort of revenue comes in, or if the HIV BLA shows tangible progress, or there is a Covid 4th wave, or news of variants infecting vaccinated people, or trial partnerships are announced, etc..., the stock will recover. I anticipate that all will happen at various points this year, including an EUA and/or full approval.
Much like Cdiddy, think I'm backing away for a while until some of the catalysts occur. Be well y'all.
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