The Equidata Investor is a stock market and investment publication issued and mailed on the first day of each quarter. The publication is dedicated to the small investor but we welcome Venture Capitalists, and savvy professional traders.
Organized in 1974 and registered in 1982, Equidata researches stocks traded on the major and smaller exchanges. We specialize in uncovering those well managed companies engaged in Biotech research,Information Technology, Wireless Communications, Precious Metals and Oil and Gas Exploration.
Although we make no guarantees of stock performance our track record is enviable. Our analysis is based on the time tested fundamental laws of supply and demand and the correct interpretation of data and historical stock chart movement.
The author is an ardent believer of the efficacy of charts and the correct interpretation of them but being bombarded with endless financial data and stock charts without the understanding of their meaning and underlying fundamentals will only lead to losses. Since the nature of the stock market is to discount the future, its nature is also to stop discounting when the news about a stock is public out or when the future has become the present. The truly BIG TRADERS, the important operators, the professionals, the bankers, the money syndicates and the professional students of the market all are the big factors in price fluctuations prior to public participation. This is the “They” crowd in stock market language, the ones who discount the future and influence the market action of stocks to a considerable degree.
CHART READING
We believe there are two lines of analysis, often in direct opposition to each other. These are the fundamentals and the technical factors. Equidata has placed the average of importance on these 2 factors at 30% for fundamentals and 70% for the technical factor. The most important method of studying the past and current market action is through charts. The advantage of familiarity with stock charts is plainly apparent. They offer the ability to see at a single glance the history of any stock or group of stocks including the stock indexes. The study of chart reading is indulged in by so few traders and it’s value so great that when any individual begins to see the possibilities of chart reading and realizes how often certain rules operate successfully, he is very likely to overdo it by over estimating the value of chart reading and their rules. He may place implicit confidence in past performance and ignore not only the exceptions to these rules but also the other considerations, perhaps largely fundamental which must have its place in successful stock market operations. The SAVVY Investor is looking for stocks which have been under active syndicate accumulation and are just ready to undergo a worthwhile market movement either one way or the other. It is of prime importance, therefore, that the chart reader be able to detect from his charts, signs of syndicate accumulation or distribution. This participation includes four of the separate stages although only 3 are necessary.
The bull syndicate accumulates, marks up and distributes stocks.
The bear syndicate distributes, marks down and again accumulates stocks.
Contrary to popular belief, we believe the number of such syndicate owned stocks is not as small as generally accepted. In a major market, the estimate may be that as many as 75 percent of all active listed issues are under some type of artificial sponsorship, whether that sponsorship be dormant and largely protective at the moment or whether it be in the form of a manipulating syndicate. If the sponsorship were dormant, then the trader should not be particularly interested in the stock.
All that the successful chart trader needs to learn from his charts, therefore, is just what stage of manipulation the syndicate is in. If the stock has finished its accumulation stage, he will buy it for a major advance. If it has just reached the end of its distribution stage, then he will sell it for a major decline. This sounds fairly simple, but the experienced trader knows that it is not quite as simple.
As mentioned earlier, there are certain definite formations, which indicate which phase any particular stock is in trading wise. However, this is visible only to the chart trader, which afford him clear indications of either accumulation or distribution. Having mastered these simple formations the chart reader will first be able to detect syndicate manipulation and, secondly, he will be in a much better position to decide whether the next major movement of the stock in question is to be up or down.