Irish Born Investor's avatar
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Context and Timeframe is critical when looking at stocks
Here is a great example that made me laugh this morning. I'm seeing some Education stocks firming up such as $LRN, $INST and the example below $EDU. It's early days though for my style of trading or investing.

So how is context key? Here is a wonderful chart with beautiful breakouts from classic technical patterns with accumulation and follow through. It's almost easy right? Above all the MAs. This has promise for a nice trade for someone who trades on a short time frame like a few weeks.

Now let's look at it on a weekly timeframe for some more context....

As you can see this is a very different image. The free fall in 2021 and the epic volume on the sell off will likely mean this thing isn't going anywhere fast in the long term. It would be quite the recovery if it did.

So when you see a great chart or even a great fundamental pitch on a stock. Always sit back and think of context, history and the future on how it relates to your goals, timeframes and expectations.

I have no position in any of the above names.
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