This is one of the hardest lessons when it comes to Financial markets. Never dismiss something just because it does not conform to your thinking process.
Case Study: Bharti Telecom
This was the state of Bharti Telecom stock on October 06 2018 -
As you can see in the chart above: Bharti Telecom stock broke a significant resistance of 380 and rallied to a previous high of 440 - only to sell back to 380. The stock was well positioned for rally. But there was so much bearish opinion around the stock that it was hard to trust a mouthwatering chart AND just see what happened -
The stock rallied 45% in following 4 weeks. People who trusted their eyes got handsomely rewarded for their good work while intellectuals paid for their stupidity. There is a very simple lesson here: Trust your eyes
Price Action does not tell you about the fundamentals. All it tells you how smart money is positioning for the next big move.
— Deepak Singh (@smarket) January 20, 2018
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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