Regeneron Pharmaceuticals (REGN)
The stock of Regeneron Pharmaceuticals (NASDAQ: REGN) is working out another higher low on the daily chart as we wait for the now confirmed bottom to attract more buying into this market.
There is not a lot to add to this forecast as little has changed from the action this week. This is a “sit tight and be right” moment, one of MANY you will experience as a trader.
It often is quite a shock to new and aspiring trader who join our trading family at Market Forecasting Academy to learn how much of trading is either spent prospecting for new opportunities, waiting for those prosects to “ripen” or waiting for your open positions to commit to a trend and either stop out for a loss or begin to march up to the profit targets.
This is the reason why trading requires such emotional maturity and discipline. It is so easy to say “STICK TO THE PLAN”, but it’s a lot harder to do that when you are bored out of your mind and crawling out of your skin to relieve the pressure of inaction.
To understand this basic human tendency, think back to the scene out of a horror movie we have all seen where an obvious victim thinks it would be a great idea to go down into a dark and dusty basement. The director usually strings things along with false scares and distractions as the tension builds to the point where it’s actually a relief when the monster attacks!
This is the mechanical reason why you will often see a stock that looked so promising just drift along sullenly for weeks at a time, then suddenly explode higher without warning.
What is happening is that the weaker traders who bought in reaction to the obvious bottom get bored and antsy and sell their positions for a tiny profit as the market hacks and chops. With the bad taste in their mouth of yet another “failed trade”, they watch to see how the stocks ends up. When it begins to rocket up, they react emotionally….”I KNEW IT WAS A BUY” and re-enter (usually at a terribly disadvantaged spot).
By making a plan and sticking to it, I am committing to my forecast. Unless there is specific and credible evidence of failure, I know I put myself into a position where the odds were firmly in my favor and so it’s my job to do the hard thing…..
(and let the math do the rest)!