Sector Rotation

In short: ” It is the movement of money invested in stocks from one industry to another as investors and traders anticipate the next stage of the economic cycle. Based on the idea that the economy moves in reasonably predictable cycles.” We as long term investors know that some stock will go out…

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Chart Patterns – The Basics

In short: A chart pattern is a shape within a price chart that helps to suggest what prices might do next, based on what they have done in the past. A lot of TA traders believe in returning chart patterns. Chart patterns are the basis of technical analysis and require…

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Leading and lagging indicators

In short: Technical traders use indicators to identify market patterns and trends. Most of these indicators fall into two categories: leading and lagging. Leading tries to predict the future, Lagging shows exactly what has been. What is a leading technical indicator? A leading indicator is a tool designed to anticipate…

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Will the “BUYING” season start soon?

MELI may be ready for the opening dance Fair value: $1010 Average yearly return: +52% Symmetrical Triangle: A symmetrical triangle is composed of a diagonal falling upper trendline and a diagonally rising lower trendline. As the price moves toward the apex, it will inevitably breach the upper trendline for a breakout and uptrend…

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Why do we focus on TA

We focus on Technical analysis only. Want to know why?

There are 3 primary things that influence a stock price:

The sector accounts for 50% of the move. 
The market, 30%. 
So company fundamentals is only responsible for 20%. I will explain more in this blogpost…

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HFT – High Frequency Trading (is helping)

Gone are the dealers on NASDAQ and the specialists at the NYSE. Instead, a company’s stock can now be traded on up to sixty competing venues where a computer matches incoming orders. A majority of quotes are now posted by high-frequency traders (HFTs), making them the dominant source of liquidity in the market.

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Trendlines

In short: Trendlines are used in TA to quickly point out the general direction of a stockprice by connecting the highs and the lows. Unlike horizontal support and resistance, trendlines are diagonal or slanted areas of value. Trendlines do behave like support and resistance in that price action can be confined…

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Average Yearly Return

In short: The Average Yearly Return is the midpoint of several returns on investment added up and divided by the number of years; the average. The average annual return  is used by investors to measure the performance of investments over a period of time. It is a percentage which is used…

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