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With the incredibly popular Avengers: Endgame film, shares of Disney Co. exploded from a low of $107.50 to $142.50 in April 2019.
After the film grossed $1.2 billion in its opening weekend (biggest in history), analysts were still seen raising price targets. JP Morgan noted the stock could run to $150 a share by the end of the year.
When it comes to trading, one of the best ways to tell what’s happening is by paying attention to the flow of money in and out of a stock.
Surely, none of us want to buy a stock if money is flowing out, right?
When it comes to technical analysis, moving averages are essential.
For example, for more than 20 years, I’ve relied on two specifically – the 50-day and the 200-day simply moving average. Not only am I looking for crossovers for golden and death crosses, I want to see if a stock is holding its own above them.
It’s not about having the perfect strategy.
It’s about the rule you abide by with each trade.
One of the biggest issues facing all walks of traders is a severe lack of discipline and structure in stock buying habits. Many fail to use stop losses, or even protect gains with a simple trailing stop loss strategy. Others risk far too much.
I love when traders tell me technical analysis doesn’t work.
While they’re entitled to be wrong, the fact remains that technical analysis does work, sometimes by up to 80% of the time. Granted, there is no Holy Grail, but if we use the right indicators, we increase our odds of success. Especially if we apply those indicators to well known stocks that may only be down temporarily.
Unbelievably, technical analysis is still written off as useless.
In fact, some denounce it as a laughable study of charts, patterns, and squiggly lines without any concrete or profitable results. Others argue it’s only good for short-term trading.
However, none of that is true.