Candlestick Trading Blog
This may not be a very good time for bank stock investing but it could be a profitable time for trading bank stocks. The Federal Reserve has just asked Bank of America, the largest US bank, what it is going to do if its financial condition worsens, according to news sources. And, it has been reported that the US Federal Housing Agency may be suing Bank of America, JPMorgan Chase and others for allegedly misleading information provided to Freddie Mac and Fannie Mae when the banks sold mortgage loans to the two government-backed mortgage lenders. There already are numerous suits against various banks, asking some twenty billion, by state attorneys general of the fifty states. Fundamental analysis of the situation is pretty bleak. Long term investing could be treacherous, although buying at the bottom of shares of surviving banks could be profitable. The more profitable approach to bank stocks as this scenario plays out is likely not investing in but trading bank stocks. With the use of Candlestick stock charts traders can follow stock prices and profitably anticipate changes in market sentiment.
The truism that the market immediately discount the fundamentals has already played out for those trading bank stocks. Bank of America and others all saw declines when news of the possible US Federal Housing Agency law suit surfaced. However, law suits go on for years and the news relating to such suits has the potential to drive share prices up and down many times. These banks may survive, may end up with government bailouts again, with the US tax payer owning shares, may join in mergers, and may go bankrupt. Trading bank stocks in this potentially chaotic situation could involve direct trading of shares and could involve buying options in the form of buying calls or buying puts depending upon which direction Candlestick analysis indicates prices of shares will move next. The advantages to trading bank stocks with options are those advantages that typically are seen with buying options, investment leverage and management of investment risk. An options trader can gain a substantially higher return on investment than a standard investor because he need only invest the options premium needed buy calls or buy puts when trading bank stocks. An options trader limits his risk to the price of the options contract as well. In trading options on bank stocks a trader uses both fundamental and technical analysis to help anticipate market trends and market reversal. Because the market quickly discounts changes in the fundamentals traders commonly profit more from following technical analysis when trading bank stocks. Using Candlestick stock charts allows traders to gain an objective assessment of market sentiment and to profitably anticipate movement of stock prices. Traders use Candlestick charts to help anticipate price movement and then buy calls, buy puts, or engage in a more complex options trading strategy to profit from trading bank stocks and other volatile equities in today’s often chaotic markets. It is with the use of easy to read Candlestick signals that traders are able to see the market clearly and profit thereby whether in trading bank stocks or any equity today.Online Stock Market Reviews presented live via the internet by Stephen Bigalow |
|
 |
|
 |
|
 |
|
 |
---------------------------------------------------------------------
<< Blog Home