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I'd say price shock due to company specific news is usually the least favorable
scenario, whereas a price shock due to some political bickering event or some news
related to another company in the sector (ex Nortel with Lucent) is a bargain to
buy.
Gwenn
wong wrote:
> Hi All:
>
> Though this is a general topic, for me, it's more for the stocks than futures.
>
> Here's an extract from Kaufman's "Smarter Trading" on price shock. (It
> runs on for a number of pages more.)
>
> We've witnessed a number of high-flying stocks like QCOM, LU, EMC, AMGN...
> that have quarterly reports or other news and then ... wow ...
>
> I don't know how to read charts accurately, so I'll leave this to the
> experts here.
>
> If we can identify which stocks have the type (c) formation (cf the
> attached file) - a "false" shock, and be ready to enter long on some of
> these "fallen angels", either stock or leaps/calls, we'd stand to gain a
> lot....
>
> Any follow-up?
>
> Regards,
>
> Wong
>
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