I am realizing that as an INVESTOR, looking for good ideas in a depressed market. The weekly time frame, which I never looked at much, before, is pretty valuable, and even, important.
Strong support? Major bottom?
- Thread starter KGTrader4
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I am realizing that as an INVESTOR, looking for good ideas in a depressed market. The weekly time frame, which I never looked at much, before, is pretty valuable, and even, important.
Just my 2 cents but I think even traders should be looking at weekly charts. If you did, Friday wasn't as much of a surprise. That being said, I don't think of it as investing -- just position trading.
Yes position trading.
In the past when I talked investing, I meant long term, pretty much buy, hold, and add.
Now, being retired, I’m no longer adding and I don’t hold Thru markets like these. That’s what I’m talking about, using the longer time frame charts to decide when to be in, and when to be out, but not playing the short term moves
And basing decisions on both the charts AND fundamentals
FWIW, also getting sequence indicator signals on the S&P monthly and NDX weekly.
What fundamentals do you use? I only use a handful but they can't be lagging -- need to be at least characterizing the current environment.
I tend to focus on valuation. Forward P/E, PEG Ratio, using consensus estimates, then, often if it’s a company with volatile earnings history, I will reduce the “E” in the P/E by 10%.
I also like to look at cash flow, and quick ratio in the balance sheet. And often, depending on what I’m looking for , I might look at the dividend yield as well as the dividend payout ratio. Something I’m looking at more lately, as I’m entering my 4th year of retirement at the end of next year my payout from my business sale ends.
Unfortunately, the only fundamental that really matters is central bank policy. If the Fed announces that they are stopping (and eventually reversing) rate hikes, then equities go higher immediately breaking any chart patterns that may have suggested otherwise.
as a trader, day or swing, yes. But as a longer term investor even as a position trader, I disagree.
If I buy a stock like WBA (Boots Walgreens) for example, right now, with a terrible chart, trading at 7x next years Earnings, with a dividend yield of 5%, which is a result of the stock being down 50%, and which represents a 35% payout in earnings, if I’ve got a 2-3 year time horizon, I’m gonna make money.
TROW is another one. Fortress balance sheet, 4.68% dividend, again, a 30 something % payout.
Everything is cycles, and all cycles end, and when they do these stocks will see strong gains, so if you’ve got a 3 year time horizon, who cares if you are down 10% the first few months.
Fed won’t be raising forever. It’s all about time horizons.
flame away in 5-4-3-2-1
Both look good. Although why are they down 50% in the first place if the fundamentals are so great?