14. Analysis Tool #11: Price Charts
Even if you do a thorough fundamental analysis, sometimes you’ll be wrong. Perhaps bad news is brewing that insiders know about but haven’t made public. Maybe your candidate is about to be blindsided by a competitor’s superior product. It’s possible that you’ve overlooked an economic trend, such as changing interest rates, which will adversely affect your candidate’s market.
Whatever the reason, you can often avoid unnecessary losses by looking at a company’s stock price chart before you buy. You don’t have to be a charting maven to get useful information from a chart.
Stock prices tend to move in trends. A stock price moving ever higher is in an uptrend, as shown in Figure 14-1. Stocks moving relentlessly ...