This a post I wrote for the traders’ community website “Ten Bags Full”. I recommend this website to retail investors for research and to share trading and investment concepts.
Which comes first?
There is always an egg before the chicken; there is always a chicken before the egg. The sequence of chicken, egg, chicken, egg, chicken forms the continuum of life. Where it started is unknowable.
There is no such question when it comes to the market and charting appearances. Charts are always historical; they follow and reflect the buying and selling decisions of market participants, responding to circumstances as they affect company profitability.
Market outcomes can never be predicted. It is only the psychological responses of traders, dominated by greed and fear that may be anticipated. Charts hint at what may happen, not what will happen. They can warn of possible risks and suggest when circumstances may be conducive for investment but little else.
Investors assume that the corporate world is there for their financial advantage. That is not how the corporate world views the relationship. Investors are there to give them cheap capital. If investors derive a benefit, well and good; but it is not their responsibility if shareholders lose money.
Panorama Synergy (PSY)
This post documents the relationship between the chart appearances and corporate fortunes and plans in the case of the small cap stock Panorama Synergy. Code PSY. This demonstrates a relationship between the meteoric rise in the share-price and a capital raising