12/29/2023 0 Comments Distribution now stock![]() The market tends to go wild for elite growth stocks and bids them up to unsustainable levels. This stage is sort of like the hangover after a party.Īs I mentioned earlier in this guide, no stock – no matter how great – goes up every day, every week, every year. This is the least-enjoyable part of a top-performing stock’s life cycle. But the Stage 3 distribution period is characterized by a trading channel. The Stage-2 buying frenzy marked a generally steady rise in prices. This reflects the push and pull of investors who are sitting on big profits and selling to new investors who, again, are late to the party. It typically trades in a sideways-to-lower pattern. You can see Apple’s distribution stage below.ĭuring this Stage 3, the stock is no longer soaring. They sell to less-informed investors who are only just now hearing about the stock and are arriving late to the party. This is a period when investors and traders who bought shares before the rally sell their positions and take profits. Or maybe investors just bid the company’s shares to very high valuations, and the stock needs to “take a breather” and return to more rational levels.īut before a correction takes hold, growth stocks typically experience what’s called a distribution stage. That stock soared 83% in less than two years.Įventually, every super-performing stock experiences a correction… a period of declining prices.Īnd as with other stages, this can be caused by a variety of things…Ī serious but solvable problem at the company… Let’s return to the Apple example we’ve been working with. Occasionally, stocks climb four, five, six, even 10-fold. It’s not uncommon for top growth stocks to double or triple in value in less than a year during Stage-2 advancements. ”Ī Stage-2 rally can be kicked off by a variety of things – an incredible quarterly earnings report, news of a product breakthrough, excellent clinical trials results, or a positive report from an influential investor.Īnd this kind of rally can last for months, even a few years. The stock enters a self-reinforcing “ rally cycle. This makes more people notice the stock and buy, which sends the stock even higher… which makes more people notice… and so on. The increased buying power sends the stock even higher. This is because more and more investors learn about the company, and they buy shares. ![]() ![]() Stage-2 advancements are almost always characterized by a surge in trading volume. You can see how Apple broke out of its consolidation stage in the chart below. The stock price literally “breaks out” of its sideways pattern. This is when a stock reaches a new high price. Large money managers learn about the company, its growth, and its huge future potential.Īnd they begin buying shares… often by the millions.Īll this buying generates what we call an “ upside breakout. But eventually, every great top-performing business generates such fantastic revenue and/or earnings growth that the world takes notice. So… let’s go ahead and learn about this hidden pattern and the secret stages that all stocks follow.Ī consolidation stage can last for months or years. ![]() Which is why if you learn about this hidden pattern today, you could be equipped with an almost unfair advantage over every other investor. Yet, it is a well-guarded secret that very few people know about. It is a simple secret to generating wealth on Wall Street. The key to making money in any stock, in any market, at any time, is to buy and sell stocks only at the right stages. This is the general idea: Every stock follows the same predictable pattern. I know that sounds like quite an exaggeration, but it is true.Īfter reading this “something,” you’ll probably look back on so many of your investments that went wrong and just shake your head… Over the next 5 minutes, you’re going to learn something that will change the way you look at markets forever – and help you get on the right path toward true financial freedom in this new world of artificial intelligence (AI). What I’m about to say, I don’t say lightly. It has since been updated to include the most relevant information available. Editor’s note: This article was previously published in July 2023.
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