GGC = A (G)olden (G)lobe (C)hart Award

The chart of chemical manufacture GGC is a pretty good example of a stock that becomes and stays overbought. That type of price action, especially when combined with the potent buy volume we can see on the daily chart chart below, tends to bode exceptionally well for bulls going forward.

The stock becomes overbought, but instead of gratifying traders who believe in simply shorting or “selling high,” the stock remains overbought and ride along its upper daily chart Bollinger Bands. Any slight intraday dip is aggressively bought, and shorts are effectively trapped in disbelief that the stock can go any higher. Furthermore, sidelined cautious bulls wait in vain for the perfect entry point. Eventually, cautious bulls and frustrated bears throw in the towel and subsequently chase/cover. It is only then that we finally see a price correction, which likely gets bought.

But it is the becoming and staying overbought for days on end, sometimes weeks, that adds credence to the bull case going forward for strong underlying demand on top of the explosive buy volume.

____________________________

 

One Response to “GGC = A (G)olden (G)lobe (C)hart Award”

Comments are closed.
Previous Posts by chessNwine

GGC = A (G)olden (G)lobe (C)hart Award

The chart of chemical manufacture GGC is a pretty good example of a stock that becomes and stays overbought. That type of price action, especially when combined with the potent buy volume we can see on the daily chart chart below, tends to bode exceptionally well for bulls going forward.

The stock becomes overbought, but instead of gratifying traders who believe in simply shorting or “selling high,” the stock remains overbought and ride along its upper daily chart Bollinger Bands. Any slight intraday dip is aggressively bought, and shorts are effectively trapped in disbelief that the stock can go any higher. Furthermore, sidelined cautious bulls wait in vain for the perfect entry point. Eventually, cautious bulls and frustrated bears throw in the towel and subsequently chase/cover. It is only then that we finally see a price correction, which likely gets bought.

But it is the becoming and staying overbought for days on end, sometimes weeks, that adds credence to the bull case going forward for strong underlying demand on top of the explosive buy volume.

____________________________

 

One Response to “GGC = A (G)olden (G)lobe (C)hart Award”

Comments are closed.