...in anticipation of a failure to trade through $14.25. Pretty funny the basis on which some people make trading decisions. "Ah gee Ma, it didn't happen last time so it probably won't happen this time." There is no absolutely no statistical basis to that "logic," other than some self-fulfilling superstition bias.
You can laugh at "TA" and knock it all you want. Personally, I don't place a lot of faith in it, except to validate a hunch.
That said, many times a widely held interpretation of a stock chart becomes a self-fulfilling prophesy. This is especially true for a stock like HUN. After the March high of $14+, the stock took a hard fall, bottomed for a few months and then rallied back to the current $14 level. Many traders who follow TA will either sell now if they own it or wait for a breakout over $14.25 to buy in. That could place a lid on the stock for now or cause a temporary selloff. Therefore, holding the $14 level for the near term is critical. We'll see.
TA, critical level and breakout all might have a meaning to a lot of followers who swear by their signals. Ultimately every level is breached and a stock goes higher or lower based solely on fundamentals and valuations majority of market participants decide to assign at a given point in time. If Hun succeeds in showcasing higher revenues, margins and profits, who says it will be held back by TA and charts?
<<"Ah gee Ma, it didn't happen last time so it probably won't happen this time." There is no absolutely no statistical basis to that "logic," other than some self-fulfilling superstition bias.>>
True, true (said the annoying lemon. Anybody watch that on YouTube? Very funny)
"Self-fulfilling Superstition Bias." aka SFSB.
Isn't this the mantra of the T/A crowd? Or just the bane thereof?
I'm seeing a T-shirt at the least!
"Technical Analysis." According to some, a prior high price becomes "resistance" or something like that, so they suggest selling in the HOPE that a stock will not be able to cross such prior high price. I've never understood the logic, nor have I ever seen a statistically valid analysis of any such phenomenon.