Buy And Hold?
The chart below is a daily chart of the
Dow Jones Industrial Average as of the close of August 28. As you
can see, the index has been hovering around its 50% retracement level of the
March 22 low to the May 22 high for more than a few weeks. Needless to say,
short-sellers are closely watching the July 11 low for additional selling
opportunities.
In general, it is profitable to trade with the direction of the
market. If the market trend is down, it makes more sense to look for shorting
opportunities. On the other hand, buying will be more successful in a strong
market. Another way to pick winners is to find a stock with a mind of its own,
regardless of market direction. In other words, it pays to watch a stock that’s bucking the trend.Â
The chart below is a daily chart of H&R Block (HRB).
This stock has a mind of
its own. It does not care how the Dow and
the Nasdaq are trading. HRB is determined to do only one thing — go up. A
stock like this one makes me re-evaluate the buy-and-hold strategy. What do you
think?