Friday, June 03, 2011

When a stock breaks to new highs

When a stock breaks to new highs, how long will the rally last? In physics, a star that burns light goes out long before one emitting a cooler, darker light. So it is with market rallies. Parabolic moves can not sustain over the long haul. Alternatively, actions that are fighting for each point of gain eventually give up and roll over. So logic dictates that the most enduring path uptrends is somewhere between these two extremes.

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