To kick off Chart Week on Talking Numbers, personal finance legend Suze Orman explains how she used technical analysis to trade one stock.
This week is Chart Week, our celebration of all things technical analysis. For the next several days, we will have the biggest and brightest names in technical analysis looking at their favorite charts right here on Talking Numbers.
To get us started, we talk charts with Suze Orman, the two-time Emmy Award-winning host of The Suze Orman Show. She is also a bestselling author, motivational speaker, financial guru, magazine columnist, and the world’s most trusted financial advisor.
Suze isn’t just a personal finance expert; she was once a broker at Merrill Lynch and a Vice President at Prudential Bache Securities before starting her own firm in the late 1980s. So, she knows a thing or two about the markets.
But what many people may be surprised to learn is that while Suze is a fundamental investor at heart, she uses technical analysis when it comes to looking at stocks.
“I probably give the impression that I’m a buy-and-hold investor which is true with some of my stocks,” says Suze. “But with some of my stock, I like to trade heavily. And, when I do trade them heavily, I look and see if there’s a pattern.”
Suze talked with Talking Numbers about one example of such a stock. Suze was until recently a heavy trader of 3-D printer-maker Organovo. While she currently out of that stock, Suze used the stock’s trading range as buy and sell signals. [To learn more about trend channels, watch the Talking Numbers tutorial “How to Profit from Patterns”]
As well, this stock’s low share price – it’s currently at about $5 per share – and high volatility worked to her advantage while it remained in within its trading range.
“You’re able to buy a number of shares when it’s so little,” says Suze. “These little swings of 20%, 30%, 40% up and down have reaped me tremendous amounts of money over the past few months.”
Once the stock broke above of its trading range, Suze stepped away from it.
“I thought I didn’t have enough base in there looking at the chart,” says Suze. “I’m currently waiting for it to come back down before I enter it again.”
To hear more on how Suze uses technical analysis when she trades stocks, watch the video above.
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