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Cline Mining Corporation T.CMK



TSX:CMK - Post by User

Post by bond46on May 04, 2012 4:33pm
281 Views
Post# 19873588

Re: of trends and retracements

Re: of trends and retracements

When one wants to be or pretend to be a trader and a day trader in particuar, he must gauge the market at every moment of the day. The top down approach is first to check the trend of the markets TSX, S&P, Dow etc, if these trends have not reversed than you move on to the sector trend, say Met Coal, if that is ok too, than you move on to the stock trend, Stock trends follow the bigger trends unless there is a serious problem with the company, and in the case of CMK we have no reason to believe that this stock, since it is a met coal stock, and since we have no official news from the company, the trend has reversed.

Now, if the stock is going down for 3 or 4 days in a row, it does not mean the trend has changed; it's more likely a sharp retracement of the stock in an upward trend. Retracements are, especially in the penny stocks very sharp indeed, especially in the off risk days. That is why I have said through this board it's a bad idea to trade  penny stocks because they are too volatile due also to the fact that too many retail traders get in because the stocks are  cheap, and thus create a lot of volatility in the market. These are some of the rules of the Junk Science, technical analysis, which of course does not always apply to penny stocks.

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