Sometimes Boring is the Most Profitable
Mar 11th, 2009 | By Charles Delvalle | Category: Chart of the DayInvesting isn’t about excitement. It’s about making money. And sometimes the easiest (and surest) ways to make money are the most boring. Here’s one “boring” way to make a lot of money over the next month.
Look for a simple pattern called a consolidation pattern.
A consolidation is when a stock’s price moves between a repeated price range for an extended period of time.
In the chart above, Intel Corp (NASDAQ:INTC) formed a consolidation pattern between $12 and $15 a share from late November until today.
Every time Intel dropped to $12 a share, it went on to rally. And every time it hit $15 a share, it dropped.
To make money on this, simply buy shares when it hits $12 (the support) and hold until it hits $15 (the resistance). Then sell your shares at $15 and at the same time enter a short-sale (which allows you to profit as the stock price drops).
There is some risk though. Some stocks consolidate for a year – others for a month or two. But one day, it will begin a trend. So always protect yourself with a stop-loss just in case the consolidation pattern breaks.
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Charles Delvalle is a self-taught market-timing professional and value analyst who's followed and invested in the market for the past ten years. He uses a unique combination of technical and fundamental research to pinpoint rapid profit opportunities with stocks and options.
Charles is also a staunch contrarian and takes pride in finding undervalued sectors and discovering undervalued, cash-rich companies. He frequently mocks government stupidities and points out the "inaccuracies (or lies, take your pick) that government reporting frequently dispels as "truth".
Good points on the consistent pattern on the INTC chart. If you look at a longer-term chart on it, you can effectivelly read market share trends vs. AMD, which of course is now near death.
I was actually once told by a prominent sell-side analyst that his rule of thumb was to simply downgrade the stock around $30 and upgrade it at $20. Only after that did he do research to fill in the blanks on his report.