Tuesday, February 28, 2006

Somethings in Stock Market never changed

I remember Jesse Livermore the greatest stock speculator in history said, "Wall streets never changed because humans never change." He traded since early 1900s till he commited suicide in1940s. He went bankrupt 3 times and bounced back strongly each time. His method was to track leading stocks which are breaking into new highs. I did extensive research over the weekend and observed that many of the stocks which broke their 52 weeks high will continue to do so. Although there will be retracement and corrections along the way. This is what Livermore called line of least resistance. Stocks that broke 52 weeks high has little or no resistance on the upside. The road up north is clear. Whereas a bottom stock which is trying to reverse to an uptrend will encounter many overhanging shareholders who has no qualms about selling if they breakeven because they are sitting on paper losses for a great deal of time. Human psychology never change till today. We can still see panic, fear, greed and hope in the market today just as Livermore sees it in his time. Hence his line of least resistance may work in our time too. Worth a look! I shall continue to research it's profitablity and define a cut loss management for this trading system. Remember, no trading system is complete without a sensible risk/reward ratio!

Media Ring: A wet dream turned nightmare.
Chart was forming nicely but 2 pieces of FA news confused traders and investors. Let's see what unfolds tomorrow.

GrowMoney Quick Pick
Volume of breakout is an essential condition!

Stock : Line of Least Resistance
Asiapharm : 0.800
Fungchoi : 0.950
Pac Andes : 0.735
Semb Corp: 3.14
MFS: 1.07

DISCLAIMER: This is not an inducement to buy or sell. You should do your own analysis on top of my postings. Copyright © 2006 GrowMoney Blog. All rights reserved.