Case Study: Price Is Priceless

I noticed a chart tonight and wanted to do a quick write up to make a point about price patterns.

There is something you can only understand after watching stocks trade for a very long time: Price is King.

Allow me to elaborate.

Over the years I have watched a chart predict that a move is coming more times than I can possibly remember. It makes absolutely no difference what causes that move. All that matters is that you are correct in your prediction and that you execute your plan correctly and efficiently.

Sometimes a chart will predict a move is coming, and with just a little bit of digging, the current chart pattern will become obvious to you, and the date the pattern should complete will make complete sense.

Let me elaborate further, as I am sure you are thoroughly lost at this point.

The chart below for MB shows a pretty clear consolidation which will most likely reach its conclusion and subsequent action point by about February 5-9th.

mb

Guess what is taking place after market on February 7th?

The company is announcing their Earnings Results. This event will very likely see this chart break to one direction or the other, and the price action is showing you all of that, even if you did not know Earnings were coming up.

Hopefully you understand why this is important. Sometimes charts make moves on news that is not Earnings, and it is not scheduled to be announced, but yet the chart will still be setting up…? Hmm. Why do you suppose that could be? Maybe because participants who are trading have their reasons for doing what they do, and it shows up, IN THE PRICE.

::Drops Mic::

-JP

 

 

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