I have seen these terms used and am wondering how much is actually a real thing vs finding patterns where there are none or that aren’t going to be predictive.
For instance from a recent article on Tesla:
“If the stock does not hold support around the $153 level, the upper bound of a consolidation range from October 2020, there is a risk of it dipping to the lower bound around $130.” https://www.google.com/amp/s/www.benzinga.com/amp/content/30088223
In: 0
They work until they don’t.
Basically investment people invented terms to help them better understand whats going on, and then they shared those terms with everyone to set a standard. Now a good chunk of investors react to those standard metrics in tandem because they were all taught what it’s supposed to mean when those metrics are hit. It’s useful for prediction purposes until someone or something doesn’t follow the rules, then its chaos and no one knows until the stock falls back into their predefined standards again.
Latest Answers