I don't disagree with you, I'm not a technician, but I've learned how they think, and observed what happens, and at some point I find they're usually correct. A stock makes a big move up, then retrenches a substantial percentage of that move, then it's positioned to advance dramatically again.
There are computer programs and day-traders who routinely trade on such moves, and frankly while I've not done it in the past, if I sense the stock has advanced so far it's due to retrench, I may sell in a Roth, where I can purchase additional shares on retrenching, if I'm right, with no tax consequences. Of course I could be wrong, then I'd be buying back in and getting fewer shares. The thing is, if you've had say a 30% gain, if it does retrench 50% of that gain, which technicians say is common, you can get substantially more shares if you play it completely right. I'm not intending to do it now, but if TLD moved the share price to over $2, I suspect it will give back perhaps $.50 before advancing further, that would make it a worthwhile trade.
I believe it's very possible that we'll see $.50 or more before we get TLD, but it will come with both up, and down days, and some days that start up and end down, and vise versa. I can't say how many times I've seen a stock trading higher all day, and closing just below the line, or just the opposite, all that matters when you look at your account is the closing price, unless you've traded the stock during the day. Computerized trading programs might trade it hundreds or thousands of times in a day profiting on fractions of a penny in gains.
Frankly, I preferred the marketplace better when stocks didn't trade with spreads of a few hundredths of a penny, but that's today's market. If the Govt. ever wanted to put an end to computerized trading, they'd add a small transaction fee, say $1, that would change the metrics dramatically. With brokerages not charging for trades, those who trade on a few cents up, or down, can make substantial gains if they're right. In that news is rarely released during the market day, if you want to be in a stock when it hits, the key is not being out at the end of the day. On the other hand, I know day-traders who jump in and out during the day, and want to be out at the end of every day. I've never traded that way, but I do know people who have.
Gary
