In a financial world awash with information, staying focused on what truly matters is an art. Often, investors can become bogged down by an avalanche of data, news, and opinions, losing sight of the core driver of success: the chart. In this era of information overload, the chart remains a timeless and steadfast guide, cutting through the noise to reveal the essence of market sentiment. It’s easy to get caught up in the whirlwind of narratives, market gossip, and the constant buzz of financial media. However, seasoned investors know that the chart, with its unfiltered depiction of price action, is the ultimate arbiter. Case in point: this heavily shorted stock now has such a powerful bullish reversal that a short squeeze is only a matter of time (when, not if). We predict that this stock has the potential to qualify as THE most epic short squeeze of 2023.
The Power of Pure Chart Analysis
Consider this: a chart of a particular stock displays a robust and unmistakable bullish reversal. Without any prior knowledge of the stock’s symbol or its financial particulars, most investors would concur on this point. The chart, in essence, provides a universally understood language that transcends the complexities of financial jargon and corporate reports. It speaks directly to the fundamental emotions of fear and greed that drive markets.
The Narrative Trap Does Not Reveal a Potential Short Squeezes
However, once the stock symbol is revealed, a curious shift often occurs. The power of the chart gives way to the dominating force of narrative. The symbol triggers a cascade of associations in the investor’s mind – past experiences, news stories, opinions from analysts, and perhaps even rumors from social media. Suddenly, the clean lines and patterns on the chart are obscured by a fog of preconceived notions.
Starting with the Chart to see the coming Short Squeeze
This phenomenon underscores the importance of a simple yet profound mantra: “Start with the chart.” Seasoned investors understand that while narratives can be persuasive and even seductive, they can also be deceptive. The chart, on the other hand, is an impartial observer of market behavior. It doesn’t care about rumors, opinions, or the latest headlines. It tells the unvarnished truth about price movements and, by extension, market sentiment.
Let’s do a short version of the chart analysis, after adding our chart annotations:
- Bulls are clearing multiple falling trendlines, one by one, in the last 6 months.
- What was considered an epic breakdown, back in April, turned out be an inverted H&S pattern, which is a bullish chart pattern.
- In the last 10 trading days, when leading stock indexes were relatively weak, this stock has printed a series of 10 green candles, some of them around 4 to 5 pct.
Do you need any more evidence to understand that this stock is eyeing the 50% retracement level, which is the fine purple line on the chart, a rise of 100%?
In an age where information is abundant but attention spans are fleeting, it’s easy to lose sight of the fundamentals of successful investing. The allure of a compelling narrative can lead investors down a rabbit hole of overthinking and second-guessing. The most epic short squeeze of 2023 (meaning), or any significant market event, might be unfolding right before our eyes, hidden in plain sight on the chart. It’s a reminder that in the noisy world of finance, sometimes the most powerful insights are the simplest ones: start with the chart.
This article, in the public post, is intended to be educational. For readers that require the specifics, like the symbol and more detailed chart analysis as well as targets, we suggest to read the weekend alert shared earlier today in the Momentum Investing premium service: The Market Is Coming Our Way >>