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Monday, October 31, 2022
Fact-checking stocks
Dear Trader..
Is a stock going up or down??
There are many ways to answer that question - trend lines, candlestick patterns, volume profile, moving averages, Fibonacci, oscillators, support and resistance, point and figure charts, Ichimoku, Gann, artificial intelligence, astrology …
I can go on and on …
But have you ever “fact-checked” those strategies?
For example, back in July several sources were convinced that Dollar Tree (DLTR) is strong and bullish that quarter:
- Investment Bank Analyst went on TV to talk up the stock - Technical analysis indicators were bullish - AI software was also pointing up …
However, when “fact-checking” the stock, it turns out that between July 23 and August 31, DLTR has gone DOWN on average 3.09% each year, 9 of the past 10 years during this time frame.
So instead of buying the stock, using a bearish options strategy to leverage DLTR yielded well over 100%+ ROI.
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