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  1. Default Does TA Really Work Around Announcement Time?

    PBB, SGW and VBA shocked the market with each stock free falling in response to negative/soft results.

    Obviously these are extreme cases as we don't expect 20%+ falls in one day, no matter what the charts say.

    Were the charts warning us that bad news was on the horizon?

    Does this confirm that the trend is our friend?

    Similarities on the chart:
    -- Downtrend of several months
    -- Long-term moving average pointing downwards
    -- Attempt at a reversal
    -- Uptrend shows signs of weakness:
    . -- Candle with a long wick (bearish)
    . -- Fails to reach the top of the channel

  2. Default

    Interesting post.SGW frightened the hell out of me. I snick in for a quick and lucky trade getting in at 1.87 and getting out at 2.07. Playing with fire.Timely warning from you and Mosiac cause me not to hold on to a minute longer than I should. Just like trying to catch a falling knife, using it and release it before the hands get cut. Not likely.The odds is against us on this.I do empathise with those that still hold on to them.There is no warning , they come down so sudden. Have a nice week end. I am shutting myself from the market for now.

  3. Default

    New2 I've always maintained that an historical price chart cannot, or, rather, should not provide useful information on how a stock will react to a news announcement.

    To me, the historical chart reflects how people have reacted to all EXISTING information that is available to the market.

    If there is a significant piece of new information, this should dramatically alter the way people now view the stock.

    I like your 3 examples, but here are 3 others.

    I honestly can't see how these charts could have forewarned the significant drops that occurred subsequent to the release of price sensitive news.

    So, I guess the lesson for me is to "beware any price sensitive news release" regardless of the underlying trend. The only certainty is that the price will move - which way it moves is anyone's guess, but if you are on the right side of the guess, there's heaps of reward.

    1. PRK was in a recent bull trend has dropped 12% (more to come next week I'd reckon) in the past 3 trading days subsequent to the VBA earnings downgrade on 4 August 2004.

  4. Default

    I came across the below event study at uni ... I'm unsure of the period of time it covers but it is for the US market and not necessarily applicable to Aus markets.

    It shows that prices begin to react to earnings announcements 10-20 days before a quarterly earnings report (accelerates about 5 days out from the announcement).

    Apologies this isn't entirely relevant to the thread (technical analysis), rather from a 'behavioural analysis' perspective

  5. Default

    I like your 3 examples, but here are 3 others.

    I honestly can't see how these charts could have forewarned the significant drops that occurred subsequent to the release of price sensitive news.

 

 

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