Every year there are opportunities to learn from winners and losers in the market. 2018 was at once extraordinary and normal.
Ulta Beauty (ULTA) is a consistently fast-growing beauty company with a stock chart that appears poised for 15-20% upside potential by the end of 2018. Ulta operates 1,107 stores and plans to open approximately 100 new stores by the end of the 2018. In 2013, online sales were $96 million, and for the last full year (2017), the online sales grew to $569 million, close to a 600% increase.
Hurricane season officially begins on June 1 and runs through November. Prior to the official start of the season this week, named storm Alberto brought nervousness to residents of states typically affected by powerful Atlantic storms. Beyond the physical damage to homes and businesses, one of the biggest inconveniences of a powerful storm is electrical outages.
This piece is focused simply on price action and the psychology which shapes it. When we use multiple timeframe analysis, we first consult the longer-term timeframe to develop our overall thesis, and then we drill down to shorter timeframes to develop our plan. Each candle on the chart combines the price action of 10 trading days.
1. Only price pays: For those of you who may not understand the concept, it means that the only thing that really matters, the only thing that determines success or failure in the market, is price action. You can try to justify a position or do complex analysis but it all comes down to price action. 2. Simplicity is the market’s greatest disguise: There is a tendency for many traders to complicate the process by doing “advanced” technical analysis, cluttering their charts with unnecessary indicators and oscillators.
As you probably know, Bill Ackman is the founder and CEO of the hedge fund, Pershing Square Capital Management. Last week, he gained a lot of press coverage for one particularly bad investment in Valeant Pharmaceuticals (VRX). Mr. Ackman liquidated his entire position in Valeant at a loss exceeding $4 billion! According to Bloomberg, his firm purchased the stock at an average price of about $166 per share and liquidated the entire position at $11 per share — a loss of over 93%! A press release said, “The investment required a disproportionately large amount of time and resources.” Think of any of your past investment losses.