Our Trend Following Charts and Analysis

Our #TheSTRAT Charts and Analysis

Let’s talk about human psychology towards weather

The researchers note that it should not be surprising that weather and seasons affect human behavior, given that humans have evolved with seasonal and weather changes since the dawn of the species.

The researchers offer a straightforward prescription: "If you wish to reap the psychological benefits of good springtime weather, go outside."

Therefore,  we at lucid-trend come up with emerging clouds over a sun as our pullback symbol to represent an optimism in stock price momentum experiencing a hurdle and prices are not going higher. Instead, they are pulling back towards the support line.

Simply put, smart money thinks the stock is fully valued and therefore they may have started trimming their position or booking some profits. They could be waiting for the next quarter result or some confirmation before they would like to bid stock any higher.

Pullback condition and some possibilities

As a long-term trend following bull investor, you are deploying a buy-and-hold strategy. You should be actively selecting stocks and yet, be less concerned with short-term price movements (price fluctuation) and technical indicators. However, this type of condition generally indicates prices are here to stay in a sideways trading for some considerable time and price may come down all the way towards support line.

If you have done your due diligence, you may feel comfortable to hold your position during the next quarter or two and collect the dividend and buy more time to take advantage of capital gain tax and wait for the stock to resume its bull cycle.

If you are a large position trader and your stock is optionable, you may consider deploying option strategy to collect premium while you are waiting for your stock to make next move

If you are a more active trader with a short-term outlook, this type of condition represents an opportunity for target trading, as prices tend to bounce back and forth from support to resistance line.

Ultimate outcome

If the growth remains good and stocks outlook is restored to being bullish it will break out from the resistance line and investors may experience renewed bull cycle. Our trend following methodology will identify this type of bull break out condition as "Emerging Sun"

If the outlook is questioned, prices may break down from the support line. In this instance, time will prove this was the early stage of the bear run. Our trend following methodology will identify this type of bear break down condition as "Storm Clouds"

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