Masterbeat Corp (MSTO)

[Dr Blunt]

For those $MSTO chartists the Wyckoff Market Trading Analysis is worth noting. You can read a pretty good explanation of it here: https://school.stockcharts.com/doku.php?id=market_analysis:wyckoff_market_analysis



"Wyckoff focused exclusively on price action. Earnings and other fundamental information were simply too esoteric and imprecise to be used effectively. Moreover, this information was usually already factored into the price by the time it became available to the average speculator. Before looking at the details, there are two rules to keep in mind. These rules come directly from the book Charting the Stock Market: The Wyckoff Method by Jack K. Hutson, David H. Weiss and Craig F. Schroeder.

Rule One: Don't expect the market to behave exactly the same way twice. The market is an artist, not a computer. It has a repertoire of basic behavior patterns that it subtly modifies, combines and springs unexpectedly on its audience. A trading market is an entity with a mind of its own.

Rule Two: Today's market behavior is significant only when it's compared to what the market did yesterday, last week, last month or even last year. There are no predetermined, never-fail levels where the market always changes. Everything the market does today must be compared to what it did before.

Instead of steadfast rules, Wyckoff advocated broad guidelines when analyzing the stock market. Nothing in the stock market is definitive. After all, stock prices are driven by human emotions. We cannot expect the exact same patterns to repeat over time. There will, however, be similar patterns or behaviors that astute chartists can profit from. Chartists should keep the following guidelines in mind and apply their own judgments to develop a trading strategy."

Conclusion: "There are four key areas of the Wyckoff market method: trend identification, reversal patterns, price projections and trend position. Getting the trend correct is half the battle, as the majority of stocks move in conjunction with the broad market trend. This trend continues until a major top or bottom pattern forms. Aggressive players can act before these reversal patterns are complete, but the existing trend does not officially reverse until price breaks a key support or resistance level on good volume. Once a top or bottom is complete, chartists can use a horizontal count method on P&F charts to project the length of the ensuing advance or decline. A trend is considered mature and ripe for a reversal once prices reach these target areas. Provided the trend has further room to run, chartists can then determine the position of prices within this trend to ensure a healthy risk-reward ratio when taking positions. Chartists should avoid new long positions when the market is overbought and avoid new short positions when the market is oversold. As noted at the beginning, these are broad guidelines for interpreting market movements. The final judgment call is up to you."