I don't know the future. I will do what needs to be done and deal with the situation as we move along
What is a Value Buy? (Price Action Perspective)
The best definition of Value: A good company where stock price has come off to an attractive level on charts. The Logic: It appears the worst is in the price but I don't know for sure. Hence, if stock cracks even from that support level - then I will assume there is something seriously wrong and exit without any HOPE.
Let me share two Value Opportunites that presented itself in 2017:
2. General Electric
Twitter: A great product and at Ultimate Support Level.
Is Twitter Value Buy?
The stock is at Ultimate support level pic.twitter.com/LCPjLz8w39
— Deepak Singh (@smarket) April 17, 2017
Now six months into the trade: the stock is up 46%
Now a great outcome with no study of Balance Sheet and P&L A/c. Well sometimes you have to trust insiders 🙂
Jack Dorsey purchased about 426,000 of the Twitter shares, at prices from $15.84 to $16.60, adding up to around $7 million
— Deepak Singh (@smarket) February 15, 2017
General Electric: A great company, attractive dividend and at 200 week ma.
My Investment argument back then: The stock is a great buy BUT if the stock fails to hold 25-26 levels, then that means there is something seriously wrong with the company and in that case one should exit it the stock breaks 25 levels on the downside
Here's what GE stock did
You have to respect the chart and what you see on the screen. GE decisively broke down and hence Stop Loss got hit. So, you see what happened to GE after that. That's how Following Price Action works. You see and you take action accordingly. Sometimes you will be rewarded big and sometimes you will go wrong but big rewards will take care of small losses if one is nimble. The whole idea with Value Investing following Price Action - Be extremely patient with what's working and extremely impatient with what's not working. I hope this helps
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One of the objectives of writing stateofthemarket.net blog posts is to demonstrate how price action works in a very simplistic manner. I have been writing about markets for years now and have developed a unique way of looking at the market. I have developed a course material if you are interested in learning about this whole space which comprises of the following
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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