Posted on July 2nd, 2008 at 12:22 PM
In my June 3rd post, I challenged the cover of Barron's magazine that said "BUY GM". Further, the cover posed the question "Why GM's share price could nearly triple". This chart shows what the chart of (GM ) looked like at the time of my post.
As you see from the chart, at around $18 per share the Advanced GET XTL study showed the statistical skew of the last 35 bars was downward. In other words, while Barron's was pointing to all the FUNDAMENTAL reasons why GM could triple, the technicals were flagging a very different dynamic. Specifically that the price of GM was likely to head lower, perhaps significantly lower.
Now, I want to show the specific strategy that could have been used to capitalize on the fact that (GM ) was very likely headed lower.
The next day GM triggered short.
In hindsight, what was more important? The fundamentals or the technicals?
I think the answer is obvious. GM is down 40% from the time Barron's recommended it.
Joel Stahl
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