PHG and speculative buy signals

Posted on Jan 30, 2009 by in Letters

Speculative is the operative word here.  The recent activity in PHG might be prelude to a breakout.  And then the gaps might be pattern gaps.  That's why it's called speculative, because it's not certain.  Nonetheless the situation illustrated by the two short tight trendlines often represents a speculative signal.  The break across the trendline with increased volume during the pattern should mean that someone is buying.  The down bars are the natural wave reaction to scalping and profit taking.  A gap or power bar across these lines often represents the early opportunity.  Also speculators make and lose more money than prudent investors, who will wait for a break of the horizontal line.

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