Buying the Dip in Tech?
Updated
When Markets are up those you missed out or sold out wait for a pullback to enter. However, when the market presents a pullback; some people find it hard to pull the trigger because the narrative has changed. The only constant thing in the markets is that investors are fickle and ever changing with their opinion. Investors tend to extrapolate the present somehow infinitely into the future until the narrative changes and they extrapolate the new narrative with the same passion into the future. I rather buy good quality businesses when they are reasonably priced constantly over time and to ignore the always changing Marco prediction presented by the media.
Look for possible retracement points in areas of support and resistance when buying a stock on a dip. These are areas where a lot of trading volume exists. A Key Area I am looking at in many tech stocks is the September 2020 consolidation event. This consolidation event gave way for tech stocks to explode to crazy new highs. It started with Highs in the September followed by sideways consolidation until the new year. Another area is the pre-covid highs. These areas are possible buy zones.
Tesla has been a good leading indicator and measure of sentiment in this bull market. Tesla has a possible reversal zone between 515 and 410. If Tesla doesn't hold there, it is possible it could retrace to 300 or 158 which is its pre-covid highs. I am looking to see where Tesla ends its correction. For example, if Tesla finds support and reverses a the September 2020 highs; I will look for other tech stocks to reverse at that same level. The charts shown, illustrate this idea that many stocks in the same sector experience the same price action.
Taking a look at the Tech sector QQQ, the 09/2020 highs(300) are far away form the pre-covid highs(230). In contrast lets take a look at IWM.The 09/2020(160) and Pre covid highs(152) are near each other. IWM has the potential to retrace down to 160. Signaling a deeper retracement. In IVE, Its pre-covid high support zone(130) is higher than its September 2020(115). 130 will act as support. IVE and IXC are expected to outperform QQQ, SPY and IWM.
ARKK is at a possible buy zone having found a possible support zone at its September 2020 highs.
Look for possible retracement points in areas of support and resistance when buying a stock on a dip. These are areas where a lot of trading volume exists. A Key Area I am looking at in many tech stocks is the September 2020 consolidation event. This consolidation event gave way for tech stocks to explode to crazy new highs. It started with Highs in the September followed by sideways consolidation until the new year. Another area is the pre-covid highs. These areas are possible buy zones.
Tesla has been a good leading indicator and measure of sentiment in this bull market. Tesla has a possible reversal zone between 515 and 410. If Tesla doesn't hold there, it is possible it could retrace to 300 or 158 which is its pre-covid highs. I am looking to see where Tesla ends its correction. For example, if Tesla finds support and reverses a the September 2020 highs; I will look for other tech stocks to reverse at that same level. The charts shown, illustrate this idea that many stocks in the same sector experience the same price action.
Taking a look at the Tech sector QQQ, the 09/2020 highs(300) are far away form the pre-covid highs(230). In contrast lets take a look at IWM.The 09/2020(160) and Pre covid highs(152) are near each other. IWM has the potential to retrace down to 160. Signaling a deeper retracement. In IVE, Its pre-covid high support zone(130) is higher than its September 2020(115). 130 will act as support. IVE and IXC are expected to outperform QQQ, SPY and IWM.
ARKK is at a possible buy zone having found a possible support zone at its September 2020 highs.
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