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Monday, October 18, 2010

Far above weekly BB was not bearish for GOOG

This is just to follow up a comment about GOOG too stretched above its weekly BB. History shows it’s not a bearish sign rather it’s very bullish. Actually this reflects a very common but very misleading concept: overbought is not a reason to short, instead it usually means a strong uptrend therefore it’s more likely a buy. Another example is we should buy stocks that reach 52 week high instead of buying stocks that fall into 52 week low.


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