I’ll let you know in on something that took years for me to learn.
It’s that at least according to my observations over the timescale that I have observed, pivot points can offer some good risk reward opportunities for those who know how to play them, especially pivot points in secondaries. Pivot points are points, say $30, where it is bullish if the current market price is above that point ($30.3 for instance) and it’s bearish if the market price is below that point ($29.7). It seems that if enough people believe something will occur, the odds of that event happening actually increase. So if the price reaches above $30 (if that is indeed a pivot point), some traders will buy, sending the stock automatically up. Likewise, if it falls below a pivot point, some traders will sell, and perhaps trigger a lot of stop losses.
Secondaries, for those of you who don’t know, are stock offerings of publicly floated companies. Because those companies have already done their initial public offering, the other offerings are secondaries.
Secondaries can be a good indicator of supply and demand, and many but not all secondaries rarely fall below their secondary price for the initial day or even the next couple of days. Due to this dynamic, it can be profitable for those who know how to trade it.
Because some will break below the offering price, it takes some skill and experience to trade them. I will write more about this subject later.
I don’t recommend shorting for those who don’t have the experience. Anything can happen at any time and the prospect of unlimited losses isn’t very exciting.
But for now, thefly’s syndicate is a great resource to find possible secondary pivot points. With that knowledge, along with fundamental, technical, and risk management, one can better one’s chances of successful investing. Best of luck out there.
Disclosure: No Position