As from April 2013 my Journey in Investing is to create Retirement Income for Life till 85 years old in 2041 for two persons over market cycles of Bull and Bear.

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Welcome to Ministry of Wealth!

This blog is authored by an old multi-bagger blue chips stock picker uncle from HDB heartland!

"The market is not your mother. It consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Dr. Alexander Elder

"For the things we have to learn before we can do them, we learn by doing them." - Aristotle

It is here where I share with you how I did it! FREE Education in stock market wisdom.

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Important Notice and Attention: If you are looking for such ideas; here is the wrong blog to visit.

Value Investing
Dividend/Income Investing
Technical Analysis and Charting
Stock Tips

Saturday, 12 December 2009

Why Do We Still Need To Read Charts? - Part 3

Why Do We Still Need To Read Charts? - Part 2

Let us take a look at MTQ for a real life example of "under-valued stock" and does chart reading help in making buying decision for TA cum FA investor?



Mr Bolton is mainly a fundamentalist, but uses technical analysis which helps in timing and size decisions. 'If I'm looking at a stock that has done well for seven years, I look at it differently from one that hasn't done well,' he says. 'A stock that has done well has most of the good news in the price. If things change, there are lots of profits that people can take so investors are likely to suffer on the downside.'

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Stock Market - A Greater Fool Theory?

Look at the shaded portion in the chart for price and volume action. It is telling us that many buyers had already bought them very cheap and awaiting to sell to the greater fools. If you look even closely at the price and volume actions after the shaden portion, it has been trading in low volume. It is telling us the earlier buyers have not been able to find greater number of greater fools to sell.

I still like what Anthony said: 'A stock that has done well has most of the good news in the price. If things change, there are lots of profits that people can take so investors are likely to suffer on the downside.'


Look at the chart, does it have evidence of good news in the price?

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