Amlin
shares (LSE:AML) are not attractive right now, because they have been in a general
equilibrium phase for a long period of time. The price simply oscillates between
the resistance level at 550.00 and the support level at 450.00, without any
protractedly directional movement.
The
price moves briefly above and below the EMA 21, trapping both the bear and the
bulls. Then the Williams % Range period 20 saunters to and fro within
overbought and oversold areas, while there are no significant movement in the
price, These are attributes peculiar to a ranging market.
Since
the market is currently ranging, it is only sexy to day traders. Investors and
position traders may stay away until things look sexy again (trending), for
that is the kind of the market in which they can gain anything meaningful. One
thing is sure: we would soon see a crazy move of about 5000 points upwards or
5000 points downwards just in a week. That will occur sometimes before the end
of this year.
IMPORTANT NOTE: This article was written last week and due to my tight schedule, I was
unable to post it till today. I can see that the price on Amlin has GAPPED
crazily upwards. This is a movement that was predicated! A recent chart has
been included with the analysis. The gap may be filled, causing a serious
bearish correction; or it may not be filled, causing the current crazy bull
market to evolve further.
The
markets sometimes move predictably and sometimes, they move unpredictably. They
are predictable enough to allow some traders make average profits that are
bigger than average losses. They are also not predictable in certain cases, to
the extent that this makes trading one of the most daunting tasks in the world.
Coming to grips with the predictability as intertwined with the
unpredictability is what can catapult us ahead of many others.
This forecast is ended by the quote below:
“People when
influenced by crowds often do things for which they have no rational
explanation. The same is true in trading. As the Japanese are fond of saying:
To take no action is an action. Unfortunately, traders believe somewhat falsely
they must always being doing something, even if it is the wrong thing.” – Chris Tate
Azeez Mustapha
Market Analyst, Trading Signals Provider and Coach
What Super Traders Don’t Want You To Know: Super Traders
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