People like to ask me whether he/she can long/short this or that stock.
Well, first of all, I have no magic power to know whether to long or to short, otherwise I wouldn't be here to post, instead I'd sunbathe on a beach of somewhere.
Secondly, all my answers are simply based on the following 2 principles. As long as you understand those 2 principles, you'd guess my answer and of course find no need to ask. That said, I'd still be glad to answer any stock related questions as long as I could find something to say, just think you'd like to know why...
- Never ever short stocks that keep having higher high.
- Never ever long stocks that keep having lower low.
In another word is, don't ever try to pick a top or bottom. Why? Simple, imagine you're blindfolded trying to grab a club. Chances are much much better you grab anywhere on the body of the club than that of exact top or bottom of it, aren't it?
OK, here is an example. You want to long GMR? It's clear in a downtrend. Just imagine that you're blindfolded, so you're willing to bet your luck that you catch an exact bottom?
Well, here is where the GMR is now.
Another example. You want to short ABG? It's clear in a uptrend, so imagine that you're blindfolded again...
Here is where the ABG is now.