Stock In Focus: eBay
Eric De Groot | Aug 21, 2017 10:45AM ET
OCTOBER: This is one of the peculiarly dangerous months to speculate in stocks in. The other are July, January, September, April, November, May, March, June, December, August, and February, Mark TwainThere are two times in a man's life when he should not speculate: when he can't afford it and when he can, Mark Twain
Tradition technical analysis, a discipline full of moving averages, stochastics, relative strength, chart patterns, and volume, is largely inconsistent and opinion driven. Bull and bears attempt to enter the trend through interpretation that's as much opinion (art form) as discipline (experience and skill). Successful trading/investing focuses solely on discipline through the study of price, volume, and time. Price, volume, and time define the message of the market.
eBay Inc (NASDAQ:EBAY). is a multinational e-commerce corporation, facilitating online consumer-to-consumer and business-to-consumer sales (chart). Ebay's trend, a series of higher highs and higher lows, defines a bullish trend. Traditional technical analysis, however, fails to recognize and anticipate normal rhythms within the trend. Traders and investors can profit from these oscillators.
Trends generally 'breathe' or oscillate up and down within broader secular trends. The alignment between price and volume, trends defined for subscriber in 40 key market in Trading Notes , defines aligned impulses (up and down) and consolidations within a secular up trend that tradition technical analysis cannot reveal (chart 2).
Ebay's aligned up impulse has produced a current, maximum, and minimum annualized return profile of 23%, 449%, and 0%; 0% means the trade has produced no drawdown since 1/17/17. Impressive! The computer warns bulls tempted to chase a winning position that the last 16 aligned up impulse since 1999 averaged 30 weeks. The current impulse is 32 weeks old.
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