Note the pink H&S pattern with a head at 62, neck at 50 which targets 38, or, a head at 63, neck at 50 which targets 37. The 37-38 level is sturdy horizontal support as well. Projection is for price to bounce upwards now (possibly to test the 200 MA at 43.50 from underneath) but then price will leak lower again to satisfy the H&S targets at 37-38 and then move sideways to sideways up as 2012 gets underway. As POT moves along in the new year, however, the gaps below will prove to be a magnet as well as the sideways ranges of 28-42 and 28-38 for much of 2012. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here or any links connected to this information. Consult your finanical advisor before making any investment decision.
Why post bullish comments on any stock when you are short on the market overall? Don't most stocks follow the market?
ReplyDeleteThat's a great question. Yes, about 70% to 80% of the stocks typically trade with the market.
ReplyDeleteYou have to compartmentalize your trading according to time frames. For any given point in time, for the same ticker, Keystone can be bullish in the VST, bullish in the ST, bearish in the IT and bullish in the LT, or any other combination. It all depends on the minute, hourly, daily, weekly and monthly charts. Whenever stocks and price points are discussed they must always be referenced to a time frame, this is one of the major reasons that traders misunderstand each other.
For the very short term (VST), this is minutes, hours and a day or so. Short term (ST) is a few days, a week, two weeks, perhaps a month. Intermediate term is the weeks and months time frame. Long term is months and years. So any ticker can easily be bullish in the ST (from assessing minute and daily charts) but, say, bearish in the IT (based on the weekly chart).
The main call on the market you see in the left margin above is a core position in the market that is a large portion of the trading portfolio. Keybot the Quant is a no-brainer to follow. This market call reflects the real-time gauge if you wanted to know the market outlook expected in the coming days.
Other charts and trades can simply take advantage of chart patterns or other trading techniques to play countertrend of the core position. This technique also allows hedging since the core position moves slower and does not catch exact market tops and bottoms. Therefore, Keystone may enter an index ETF to front run an anticipated move in the indexes and be say, short via an ETF but long via Keybot at the same time. Keybot will move to the short side when the algorithm triggers.
So it's all good. Hope that explanation helped a little. If you are not a day trader or short term position or swing trader then you are correct, the market call in the left margin can simply be used to travel the smoother path thru the trading year.
Thanks for the explanation. I enjoy reading your blog and have learned from it. I'm reading John Murphy's book on TA. The only adjectives that describe my trading are "bad" and now "cautious". I bought some SCC based on your post about retail and I'm up 6.7%. So thanks for that.
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