Where on earth does the time go? It must be about 3 weeks since I started this Series of Blogs - I expected to nail them in a few days !!
Today I want to cover a simple concept - Long Term Moving Averages and a couple of much more complicated ideas - MACD and Bollinger Bands - however, the latter 2 are probably the BEST Indicators in my Toolkit (although RSI is pretty good as well).
As ever, it is probably advisable to read the earlier Parts 1 to 4 before you delve into this one.
As I have probably hinted at, my punching out a Blog method is quite sort of random sometimes. I was going to write about how I Filter out good potential stocks from duff ones in a quick ‘Triage’ type process, and then I thought maybe I should do it logically and start with how I find stocks to shove in the Filter in the first place.
But, oh no, that is far too sensible and easy to follow. So, I have decided to write about what makes me Sell stocks. So much for a logical order of things…….
This is really in response to an ADVFN Bulletin Board comment on the CAMB board after my recent ‘Buying Rationale’ Blog (many thanks Imranawan for your helpful inspiration !!). The gist of the post was that my Blog was ok and it was helpful to read about reasons and thought processes for buying a stock, but how about reasons for selling?
THIS IS NOT A TIP. I AM NOT A TIPSTER. PLEASE DO YOUR OWN RESEARCH.
You may have seen on Twitter that I bought another chunk of Telecom Plus (TEP) for my Income Portfolio ISA this morning, at a price of 1218.28p. I will just do a quick Rationale today - I suspect many readers are already aware of TEP so I don’t think there is a huge need for me to go into too much detail.
I bought about 1% of my Overall Portfolio Value (this includes everything, this is not just a % of the Income Portfolio) and TEP is now about 4% in Total - so one of my biggest positions, and very much a Long Term Hold.
OK, in Part 3 I promised you Relative Strength Index (RSI) and that’s what I am going to give you - but this is delayed gratification - I am gonna tease you with Moving Averages first - you lucky people…..hmmmm.
I love the RSI Indicator - it works really very well - and gives great Signals whether to Buy or Sell.
Look at the Chart below. In the Top Window we have the normal Share Price Line with a few coloured meandering lines. The sort of nearly Flat Light Blue Line is the 200 day Simple Moving Average (200 day ma). The Darker Blue Line is the 50 day Simple Moving Average (50 day ma).
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