Your belief is tested when the things you love don't perform the way you wish. It's like believing when things are really down and out. In stock market - your faith is tested when a strong stock has pulled back a bit and gives you a compelling buying opportunity. But the environment is scary and newsflow negative. It's at that moment - you have to decide. If luck is on your side - then your faith in such stocks results in enormous rewards
Let me share five illustrations
1. Headline in May 2016: Apple iPhone Story over but Apple stock was at very strong support level.
Why Apple stock can bounce from current levels...the stock is at solid support levels pic.twitter.com/8khPxXhRE6
— Deepak Singh (@smarket) May 3, 2016
Apple market cap is now $517bn....remember few months back - the debate was...when will it become trillion dollar market cap company
— Deepak Singh (@smarket) May 17, 2016
Apple is at 200 week moving average NOW - The Utlimate Support level pic.twitter.com/c9ujiMkwiz
— Deepak Singh (@smarket) May 13, 2016
Here's what Apple stock has done over last 12 months....just amazing move from levels of $90 in May 2016
2. Alibaba: Post Trump Victory, the stock pulled back to very important support level
Alibaba stock is at very attractive support levels:
1. 200 dma which it has held in the past
2. Gap Filled Support pic.twitter.com/ADBO2pUlJU
— Deepak Singh (@smarket) December 20, 2016
Here's what Alibaba stock has done in last six months - pretty impressive move. Yes that support mentioned in the above tweet worked like magic
3. Twitter: Nobody Loves Twitter but Can this company go down which is disrupting the world's establishment
Is Twitter Value Buy?
The stock is at Ultimate support level pic.twitter.com/LCPjLz8w39
— Deepak Singh (@smarket) April 17, 2017
Here's what Twitter has done since then-good bounce right from the level mentioned above
4. Exxon Mobil: Stock down and Out but a bluechip stock cannot just collapse
Exxon Mobil - Big loser in last 3 months. The stock is back to support levels..div yield 3.71% but still no takers.
— Deepak Singh (@smarket) February 22, 2017
Crude Oil has come down pretty substantially this year and it has played on Exxon Mobile. Despite so much negativety, the stock has somehow weathered the storm pretty well so far
5. Now Watching Walt Disney stock
Disney is a technical buy around current market price. The dip buyers should come and take the stock higher pic.twitter.com/S4zigR1gc6
— Deepak Singh (@smarket) June 22, 2017
We will see how Disney stock performs in 6 months time. Right now, the stock is matter of faith for many
I hope you found the above case studies interesting and how Price Action can help one make a sound investment decision just when it matters. Yes I call it Science of Stock Price Action.
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers