TickerHound

KenLong answered 2 months ago …

http://www.tradingmarkets.com/courses/tmcourse/

You may have to register, but its free. This is a very simple course on pullbacks of different magnitude. That is what the whole Trading Markets philosophy is built on.

Basicaly a pullback is when a tradable assets price trend gets overextended and corrects or pulls back to a more reasonable level. The trick is knowing when a pullback is just that and not a change of trend.

Comparing current valuations to historical valuations can help. But valuations are often more representative of what the public is willing to pay. High valuations simply mean high demand.

Looking for strong growth fundamentals, earnings growth, a history of meeting or beating analysts estimates, current esitmate revisions, growth of the companys net value, the bottom line after all debts and earnings are figured in. This information is easily available on Yahoo Finance and Zacks.com.

But the most important measure is drawing a diagonal line under the trend connecting the lows, and marking the important support points, at recent lows and places of congestion. This will usually tell you if you have a stable trend, or a choppy trend, and it will give you something visual to watch and make it easier to set stops.

Theres always lots more, but this is the gist of it. Decide what your interested in the most and grab a book. There are plenty of them out there. Just check the shelves at your book store or library.