Deemer on Technical Analysis: Expert Insights on Timing the Market and Profiting in the Long Run

CHAPTER 11TOPS AND BOTTOMS

In order to gain the right perspective, long-term investors should look at a weekly chart rather than a daily one. (I must confess, though, that when I first got into the business, I thought that weekly charts were glacially moving things with no action at all and paid absolutely no attention to them. It’s a good thing for me that computer-generated intraday charts weren’t available back then, and I had to confine my lust for constant action to daily charts. As I’ve matured, though, I’ve come to understand that for long-term investors, weekly charts are key.)

When you look at a stock chart—whether it’s a daily, weekly, or monthly chart—you’ll see one of four things:

1. A top. The stock is ending an advance and preparing ...