This Is Why You Need To Pay Attention To Round Numbers
I want to sell it at
100. I want to get rid of my shares at 50. I don’t know why, but it
must be just human nature to seek round numbers.
11:56:35
Alert
After failing to take out 60, Biogen Idec (BIIB)
is testing the 50-day SMA. The stock is down 0.58 at 59.19.
As you can see below, instead of challenging the July 30 high, Biogen is
struggling to take out 60. It is still trading above its 50-day SMA, but the
share price is near the day’s low.
Look at the 3-minute chart. BIIB immediately sold off at the open, and
the intraday traders had a chance to sell the stock short at the first pullback.
Besides conventional resistance/support levels, watch for the round numbers.