Playing Biotechs: ALL
TIME HIGH RESISTANCE: Use It Or Be
Sorry.
Misleading
Strength
Just
below all-time high.
TIgerSoft
Rule: "Don't Buy Just Below An ALL-TIME High.
If
you must Buy, wait for a Clear ALL-Time High
This
is simple to demonstrate with Yahoo multi-year charts. Here is the
chart of Polydex
Pharmaceuticals. From April to July in 2006, the stock
seemed to show big money
buying. There was a lot of blue Accumulation
from April to July 2006.
But the buyers proved to be bigger than smart.
From
this case we can see the some lessons:
1)
Don't buy such a stock near its all-time high.
2)
If you do buy it and you realize your mistake, sell it if ithe red 21-day
ma
turns down.
3)
Notice any bearish price pattern development and heed it. Here we
see
a classic head and shoulders top.
4.)
The stock's 50-day ma turns down. That causes us to heavily
discount
high accumulation.
5.)
The stocks shows miserable relative strength. The ITRS goes
below
-.10. We hardly every buy a stock like this, especially when so
many
stocks are performing wonderfully.
Yahoo.com
makes it easy to see the all-time high.
Normally
the Tiger Accumulation Index Works Very Well
Look
at TigerSoft to see how to trade the swings of the stock, but always know
where
the stock's all-time high is. Normally, the best single way to trade many thin
biotechs
is
to observe from the TigerSoft charts what insiders are doing and trade as they do.
For
example, look at the chart this stock in 2005. Do not use it when key support
is giving
way.
Thus, in the case below, if the stock had fallen below the 4.25 support, it should
have
been
quickly sold. Big money is usually smart. But not always.
2005
Polydex Pharmaceuticals
More will be added to this soon.
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