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Brokerage companies do not want you to sell. When any stock is going either up or down for any extended period of time it does seem logical that it can become overbought or oversold, but let's examine what that means to your ownership. The reason a stock started up is because the underlying profit projection is going to produce substantial profits that will make the stock more valuable. Article: Has your tie ever told you that a stock is “overbought” or “oversold”? He probably went on the explain that the stock you own (I hope you didn’t) had gone down so far that it now was oversold and due for a rally. He might also have encouraged you to buy an equal point to “dollar cost average” your position so that when (“if”- he didn’t say that, I did)) it did go back up you could “get out even”. He might even say you “could make a fortune”. Waiting to get out even is the great trap that is preached by all the big Maul Street dealing houses. What is even worse is most brokers and financial planners it. What happened to all those aesthetically appealing joint-stock company reports sent to you telling how wonderful this stock was previous to you store it. Maybe you revamp read those back to him. fare companies do not want you to sell. When any stock is going either up or down for any extended period of time it does seem logical that it can burst forth overbought or oversold, but let’s examine what that means to your ownership. The reason a stock started up is for the underlying profit projection is going to produce substantial profits that will make the stock more valuable. At some point it is going to reach a true valuation and should stop advancing. What usually happens is it goes after world true valuation to what could be named overbought (over valued) and then starts down. You may be encouraged to buy when a particular stock becomes “hot” and everyone is sale it. When all the sheep are shopping you want to be a seller or you will also be sheared. Suppose all this was in caution of future profits that did not materialize? Then the rise would turn over and head down. This would be more likely for a smaller stock company than one of the giants, but giants have been toppled. If any fraud was involved the buddy might even go bankrupt. Think back to WorldCom that went to the moon and was finally flushed down the sewer. Did it EVER while it was tanking run oversold for a rally? Not hardly since there was no value. Unless you truly understand how to trade overbought and oversold situations the best thing to do is keep your hands in your pockets. Beauty is in the eye of the beholder. Overbought and oversold is in the mind of the buyer/seller. Article Index: | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20 | 21 | 22 | 23 | 24 | 25 | 26 | 27 |
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