Technicians frustrated as markets ignore sell signals : A laundry list of widely followed chart signals are screaming ‘sell’. But lately whenever stocks pull back, investors are waiting, telling their brokers ‘buy’. That’s making the stock market rally a frustrating experience for many technicians. They believe what their charts are telling them, but the market isn’t cooperating. (page 8, Business Line dated 12-4-13)
When all technical analysts yell “SELL” only a few can sell; because, to take place a transaction a buyer is a must. If all traders wanted to sell a stock and there is nobody to buy, nobody can sell. This is also true when everybody yells for a “BUY”. So, whenever more than 80% of total traders wanted to sell or buy, the number of transactions decreases and between 95% to 100 % the volume reduces to zero. And when 100% traders wanted to sell/buy no transaction takes places and price stands still. Then market dynamics acts upon and slowly sellers turn buyers and price moves up. And when prices move up, more sellers become buyers and reverse process (short covering) starts spiraling prices quickly. Remember this and be a buyer/seller of a fundamentally strong stock whenever 95 – 100 % traders wanted to sell/buy.
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