Friday, 19 July 2013

How Low or High Stock prices can go?



This is one question people ask and here are two interesting examples to illustrate one very interesting point.

The Point: Trend is your friend and it can take you to extreme levels
Yes Stock price can go near ZERO

Example: S Kumars Weekly Chart
As you can see in the chart above – S Kumar stock has been in strong downtrend for last 3 years. From levels near 100 – the stock is now trading near 3.4
Yes Stock price can keep going HIGHER and HIGHER with no correction
Example: Bosch Weekly Chart.


As you can see in the chart above – it is a weekly chart and just see how Bosch has been in strong uptrend and has kept on going higher and higher.
What Lesson we can Learn?
Never Fight the Trend. You can never imagine how high stocks can go once they are in uptrend and similarly how low stocks can go once they are in downtrend.

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