Friday, August 24, 2018

How to Trade Stocks That Hit All-Time Highs

Each phase of an uptrend has unique factors that need strategic shifts in risk management and profit objectives. This is especially true when a security rallies to a new high that hasn't been traded in its long-term history. This scenario can build wealth quickly but requires special technical rules to capitalize on the mechanics in play.

Momentum dynamics shift when a security reaches uncharted territory. The new high print signals very favorable conditions in which there's no oversupply in the form of shareholders who need to sell at a loss or to get even. This lopsided equation can translate into rapid gains that often exceed logical price targets but can also generate unexpected behavior that encourages emotional decision-making. 

Resistance disappears when a security hits an all-time high but hidden obstacles remain, ready to surprise unwary longs with reversals and shakeouts.

Read more at:

No comments: