The Faraj List of Exploding Stocks-Part 6.07

warala,

thank you for your well wishes. hope this year would prove to be a very fruitful one for all and may the world would be a more peaceful one to be in!!

it is a million dollar question weather to enter a strongly rising stock riding the crest of its wave or wait for calmer waters after the wave had broken down.

at least one authority suggests you should not ride on the crest of the wave, surfers do get badly injured or even drowned doing this. the reason is that a strongly rising stock could turn round and head in the opposit direction just as forecebly!! especially small stocks. the reason for doing so is not rooted in the fundamentals of the stock but almost in all cases rooted in thechnicalities. speculators could be selling simply on making 20% profit, no other reason!!

selling a highly liquid stock with a spread well below 1% is not such a costly business. but selling a stock such as 'sun' with spreads running typically at over 10% and up to 15% can be very costly indeed especially when taking into accout other charges. a mistake could easily see one third of the capital invested wiped out in one trade!

buying after retracemetn and consolidation provides a good opportunity for a safe point of entry. you will have a safe point of entry with clear support line to set your selling point at. osh is currently offering a good point of entry. its spreads tend to run in the 6% range. see the chart below.