I wished my well-meaning colleague a happy New Year and asked him how his portfolio was doing. He said it was doing swimmingly well. So I asked him what stocks he would recommend to me for the long term and he suggested to take a look at Altria Group. And boy! What a find!! I am thinking of what levels to sell this stock after taking one look at the chart! This is why.
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The chart of Altria group a perfect example of how even after using Wave theory one can actually go wrong if proper stops & the discipline to stick to them not applied. The 3 wave move down after this stock completes Wave 3 at 26 gives a feeling that wave 4 has got complete. Also the fact that the subsequent 5 wave move would have convinced traders that even wave 5 is complete. So if a trader had gone short he sure would have made money, but would’ve never preempted that the fall back to 23 levels would actually take the stock higher.
Hi K p Ganesh, your observation is very true and nicely sums up what traders should always keep in mind.