Question

In: Finance

1-As for actually trading using technical analysis, what is one of the most important keys to...

1-As for actually trading using technical analysis, what is one of the most important keys to doing well?

2-A commodity makes a new high of $60 and comes back down to the long-term trend line at $55. If the commodity starts to rally again back to $60, what is the technical analysis term used to describe this $60 level? And, what are the implications?

3. If a stock has really good news and the stock jumps a lot higher the first day and then continues on moving up for another two weeks, this is what kind of market reaction?

Solutions

Expert Solution

1. Most important keys to do well while doing a technical analysis is getting control of the emotions and following the system. Traders have a psychology of Revenge trading and selling according to their mood, they do not follow their systems signals,in order to succeed in the long run in the the trading arena, one has to be getting rid of his emotions and following the technical analysis.

2. $60 can be said to be acting as a resistance while $55 could be said to be acting as a support so when the share fell from $60 to $55 it was a symbol of resistance. When does share rallied from $55 to $60, it was a symbol of taking support and then rebounding.

3. This is a symbol of trending market in which the good news is getting continued upon several weeks and Markets are still reacting positively. This type of markets are highly bullish on the good news.Good news are discounted for many weeks as people are discounting it in the long run.


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