Someone requested for this chart. Here's my 2cents on it :
1. Some simple mathematics - Top is around 38 dollars, low is at 15 dollars. Now, the price is around 27 dollars. If you measure it, you are somewhere in the middle range now. That means, if the price action favours you, you can make potentially 11 dollars profits. Else, you lose 12 dollars loss. Risk- reward is 1:1. Are you comfortable with that ? I do not analyse the fundamentals of the company, so you need to dig in a bit to assess its future business.
2. Chart tells me -
a) we are at an inverse H&S pattern now. The resistance is at 27.46 which it needs to clear now. Once cleared, there is another one at 30.23. Only if this is cleared, then we can see it climbing towards its previous peak of 38 dollars.
b) What causes the more than 60% plunge in 2019 till mid March this year ? Is it a one-off event ?
M&A can be a double edge sword if the new entity does not offer more value than before.
c) Unless I have bought this stock at 8-10 range, I am not quite motivated to long on it for reasons I mentioned above. For example, I invest in Tencent , a business that is relatively easy to understand. No. 1 in gaming worldwide and the trends, research shows the CAGR growth is huge in the future. They invest in growth sectors like digital finance, e-commerce, cloud computing, all pointing to the digital transformation that the world is going through. How about Pro Medicus ? Is the product in demand for a long time and not a one shot wonder ? Think diabetes, cancer, hypertension drugs manufacturer.These are unlikely to go away in the next 20-30 years , in fact the probabilities of people contracting will increase thus requiring more of the drugs which increase the revenue.
On the whole, while the chart appears bullish , you must ask yourself, are there any better trade opportunities available ? Or do you know something specific that gives you the advantage to go long ? And are you trading for short term gain or invest for the long term? All these will have a place in your entries and selection of this stock.
I wish you all the best in your trades. As always, use stop loss, employ appropriate capital, position sizing ,etc.
1. Some simple mathematics - Top is around 38 dollars, low is at 15 dollars. Now, the price is around 27 dollars. If you measure it, you are somewhere in the middle range now. That means, if the price action favours you, you can make potentially 11 dollars profits. Else, you lose 12 dollars loss. Risk- reward is 1:1. Are you comfortable with that ? I do not analyse the fundamentals of the company, so you need to dig in a bit to assess its future business.
2. Chart tells me -
a) we are at an inverse H&S pattern now. The resistance is at 27.46 which it needs to clear now. Once cleared, there is another one at 30.23. Only if this is cleared, then we can see it climbing towards its previous peak of 38 dollars.
b) What causes the more than 60% plunge in 2019 till mid March this year ? Is it a one-off event ?
M&A can be a double edge sword if the new entity does not offer more value than before.
c) Unless I have bought this stock at 8-10 range, I am not quite motivated to long on it for reasons I mentioned above. For example, I invest in Tencent , a business that is relatively easy to understand. No. 1 in gaming worldwide and the trends, research shows the CAGR growth is huge in the future. They invest in growth sectors like digital finance, e-commerce, cloud computing, all pointing to the digital transformation that the world is going through. How about Pro Medicus ? Is the product in demand for a long time and not a one shot wonder ? Think diabetes, cancer, hypertension drugs manufacturer.These are unlikely to go away in the next 20-30 years , in fact the probabilities of people contracting will increase thus requiring more of the drugs which increase the revenue.
On the whole, while the chart appears bullish , you must ask yourself, are there any better trade opportunities available ? Or do you know something specific that gives you the advantage to go long ? And are you trading for short term gain or invest for the long term? All these will have a place in your entries and selection of this stock.
I wish you all the best in your trades. As always, use stop loss, employ appropriate capital, position sizing ,etc.
Comment:
Moving up nicely. Congrats to those who bought this shares