The Philippine Stock Exchange Composite Index (PSEi) tracks the functioning of the most representative companies listed on the PSE. When this index is inward a bearish cycle in addition to treks down, it agency that players who command bulk of the coin inward the market, are fearful. And the affair amongst fear, every bit amongst greed, it's contagious. So expect most of the other stocks to follow this sorry cycle every bit most traders in addition to investors sell their positions inward telephone commutation for cash.
Anything that doesn't follow the major tendency in addition to goes the contrary way is an outlier.
According to Merriam-Webster Dictionary, an outlier is a statistical observation that is markedly dissimilar inward value from the others of the sample.
Let me assistance you lot visualize that.
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Now receive got for illustration DD (Double Dragon). The PCOMP from Late May of 2015 to early on March 2016 was a deport cycle. But this wasn't the illustration for DD every bit shown inward the lovely nautical chart below. It even made novel 52 calendar week highs during the deport season. If you lot don't telephone telephone that rigid I don't know what is.
*Market Cycle based on the lay of the 100MA.
100MA below prices = Bull
100MA higher upwardly prices = Bear
This is what marketplace veterans call...
"A bull, inward a deport market."
And the best affair virtually outliers? When the bulls furnish in addition to everything becomes rosy in ane lawsuit again for the index, outliers tin continue a rampage of gains!
But non everyone gets to ride outliers. Majority fifty-fifty rest out of it because...
"It merely doesn't brand sense."
"Why purchase a stock that is making a serial of novel 52-week highs when you lot tin purchase a stock that merely made a novel all fourth dimension low? Wouldn't that survive meliorate since that would interpret to bagger gains if it goes dorsum to it's all fourth dimension highs?"
"It merely doesn't brand sense."
"Why purchase a stock that is making a serial of novel 52-week highs when you lot tin purchase a stock that merely made a novel all fourth dimension low? Wouldn't that survive meliorate since that would interpret to bagger gains if it goes dorsum to it's all fourth dimension highs?"
-Nakamura San
Sounds familiar?
It's because Nakamura San is every amateur trader you lot know - who buys at "cheap" prices para makamura but ends upwardly ipits in addition to nagmumura.
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People fearfulness what they don't understand. But allow non fearfulness cripple you lot to the path of enlightenment. So the side past times side fourth dimension you lot run across a stock making novel 52 calendar week breakouts during a deport market, shout back really carefully earlier you lot ignore it.
Who knows? You mightiness halt upwardly amongst something similar this...
As always, Caveat.
After all, I'm merely a Fictional Character.
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