Does the move in the Nasdag, Dow, & S&P, and their support & resistance levels effect whether you get into an individual stock even when their entry points are reached? Does it matter if the market is going in the opposite direction?
Great question. This is why we don't just jump into positions automatically. Let's say you are given directions to a location downtown. You follow those directions and are right at your destination. As you are beginning to cross the road, a convoy of trucks comes barreling down at you. You could make a mad dash and make it across the street to your destination-if you are lucky. Most likely you would get squashed.
Seventy-five percent of all stocks move with the market. Good news about a stock could cause it to buck the trend (e.g., STM and its stock split announcement today). A strong pattern can withstand the market in some instances. We will still make those plays, but we have to be confident in the move and ready to get out if the move fails.
If an average is approaching support and uses that support as a springboard back up, that is a very bullish time to take positions when a stock hits your target. We make intraday trades this way as well, watching for when the NASDAQ or Dow break their downtrends or bounce up off of support.
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