lowtrade

[lowtrade]

It's called the rubber band effect. Each stock has a history of snapping back. It varies stock by stock what % it takes to snap back.

When investing long, one should do a rubber band effect evaluation to help with signals for taking some profits or buying some more. The 50 day is thought to be the mid term true value for the stock. And good for position trades.

Use the 100 day for 1 to 3 year positions. You can also do this on the 200 day for Warren Buffit types of investing long for 3 to 10 years.