The reason we look to the charts is to get an idea where stocks have been and what a potential scenario lies ahead for equities. Even though we are intermediate to longer term investors, viewing charts can give us an edge on entering or exiting a position or hedging a portfolio in the short term need be. So what are the charts showing us through mid week. Stocks have been consolidating recent gains over the last three days as shown below by a 60 minute chart of the S&P 500 index.
I talked about Fibonacci retracement levels before in this post Fibonacci Retracement. The chart below shows that stocks have consolidated around the 38.2% level, which is typical Fib consolidation prior to a potential move higher.
Bottom Line: Charts are just one of many tools to help manage risk. Fundamentals and valuation are two other important areas of focus when analyzing individual stocks or the market as a whole. This weekend I am going to dedicate a post to just the fundamentals of the market and where stocks are at present. As always thanks for stopping by.
No comments:
Post a Comment