There are base traders. They want to accumulate when the company is basing, stabilizing and sleeping. Example of this is Petron corp. how many months of basing period is the 11.50-11.90 areas? Momentum will only enter this on a breakout and perhaps get their positions 12.50-12.90 So, example of bases were smph before at 14.50-15.00 (6 month slumber) Some people want to have a base when the stock is not doing much action. No significant flows to affect the price up or down. Example/ you will see accumulation flows on PNB and yet the stock doesnt rise- its just consolidating. At 7 house also gets accumulation but not so much as to attract momentum players, only value hunters. You choose value when you cannot look at the market everyday. In markets, you can look at the stocks deeply sold and stabilizing like Pgold has encountered billions of foreign selling before but stabilizing at 33-35 levels. Those are just basing camps. Rwm was basing at 8.30-8.50 levels and even had a puke and vomit effect at 7.60-8.00 but that was all. It changed the value to momentum when it broke 8.60/9.00 respectively. (Those were the proper buy on breakouts) then next resistance is 10.00 Edc had a base at 6-6.30 before breaking out and now is on continuation mode with higher ledge supports at 7-7.30 should some hysteria and market drop occur. You can form a base on sleepy stocks and make money by adding up when they break out. They will be your babies so to speak. You can also just find companies where the bases are locked and loaded and party on with the new highs who just want to push their winners higher and higher.
Posted on: Sat, 27 Sep 2014 02:21:22 +0000