Are gold and silver nearing their seven-year high on Coronavirus impact; stocks to slide next? As the chart below shows, a period of oversold conditions has allowed this virus to recover from its winter lows.
What does this virus really mean for stocks? Stocks that are trading below fifty dollars on a Friday are a good sign. However, it will be at least one month before we have a strong reading of what the market has experienced with this virus and it will be at least two months before we can assess whether this virus will continue to strengthen or will fall back down to earth and begin to weaken.
As a result, there is a lot of volatility with regard to stock movements, which should be taken into account when making your investment decisions. Here is how to get a better read on this virus and it’s impact on the market:
* First and foremost, you need to understand what this virus is, and what it is doing to the stock moves. This virus will never affect a stock in an organic way. Instead, the symptoms of this virus are a huge drop in prices, followed by a sudden rise, followed by a steep decline.
The stock that drops below a certain level will not automatically rise above this level. You have to understand that this virus has no attachment to the fundamentals of a stock, but rather, it takes place because the stock moves outside the normal trading range, which has been established by the supply and demand on the market.
Stocks that have fallen below a certain level have been driven down by investor fears. As the price begins to rise, the fear increases, which prompts more traders to sell in order to protect their positions, but as the price falls, the fear increases even more, until a buying frenzy occurs in the market.
It is important to note that this virus has had a very negative impact on the short-term traders, which means that long-term investors are now getting a bigger share of the market. One of the primary reasons for this is the fact that short-term traders are no longer finding it profitable to invest in the short-term market. As this market moves lower, they have shifted their attention to the long-term market.
As a result, the price of these stocks trades below the short-term level, which can be due to many factors. You see, there are two large groups of stock traders – the long-term investors and the short-term traders.
Therefore, investors have become confused about what stock to choose. However, when you understand that this virus has been generating a vast amount of fear in the market, you realize that it makes sense to look at the long-term sector and identify the sectors that you want to take advantage of.
You see, a sector that is constantly under attack is going to have a strong resistance level, which is simply the price level at which the stock trades above. As you can see, this virus has had a negative impact on the stock market, but it is still one of the strongest stock market performers.
Ifyou can identify stocks that are falling below the resistance level, you will be able to profit from the weakness and you will find that the stocks move lower as the summer approaches. That is why a two-month waiting period has been set up so that you can determine whether the virus is going to weaken and if so, what is going to happen to the market.
There is no doubt that we will see some corrections in the stock market as a result of this virus, but you need to look beyond the fact that. The stock market always finds its strength and weakness, and if you study the charts closely, you will see that this virus has weakened the market, which means that it is a good time to put your money where you know it will do well.