Samsung Electronics is one of the most well known and popular brands in the world. From mobile phones to laptops to washing machines and air conditioners, the Samsung brand is synonymous with modern living. Despite its issues with exploding mobile phones and the heir to the Samsung empire going to jail, the stock of the company has gone up by an impressive almost 200% in less than 2 years.
As traders, we want to look at the stock chart of this company and see what we can learn from it. There are many fundamental reasons why the stock price is going up and up. We leave that to the experts. But as traders, we now study the chart and see what we can learn from the chart and we will also analyze if the stock has potential to go up more.
The chart above is the monthly chart of Samsung Electronics. One look at it and it shows us the impressive run the stock has had. From 2016 to November 2017, the stock has risen an almost 200% higher. If you take the price from around the lows of 2008, the stock has risen by almost 700%. A really impressive return in less than 10 years.
Let's take a look at the chart lessons we can learn from Samsung's stock chart.
The stock was in a boring trading range from 2004 to 2009. If you were an investor here, you would have experienced periods of rise and then a decline and then a rise and a decline. Quite frustrating to see your portfolio go up and then down. Which is why its always best not to play stocks that are in a trading range. Better to wait for a breakout.
The stock eventually broke out of the trading range but the price action merely stayed at the top of the trading range. Again a period of frustration for investors. It had a brief rise in late 2010 but it corrected back to the top of the trading range which acted as support.
This is where it starts to get interesting.
The stock formed a break downtrendline at support in the monthly charts.
Once it broke above the downtrendline, it had a massive nice run up. However from 2013 to mid 2016, the stock merely drifted down in a downward channel fashion. This can be quite frustrating until you realize that the stock was forming a pattern that will setup the nice bull run up in 2017.
Samsung eventually broke above the channel and started its impressive run up.
There you have it! Even in the monthly charts, there are price patterns which you can observe and take advantage of. Learning some technical analysis will surely give you some nice rewards.
The chart above is the daily chart of Samsung.
The trend is indeed your friend. Notice how Samsung was in a nice uptrend. It stayed above the rising 200 MA most of the time. This is a picture of strength in the stock. By making a series of higher highs and higher lows, the stock is actually trending higher.
When a stock is in an uptrend, traders should look to:
Samsung Electronics provided many breakouts where traders can put their money into the stock. There are also dips in the stock where traders can enter the stock at a cheaper price.
So where will Samsung go now?
We are big believers in trend following. As long as the stock is in a nice uptrend, the path of least resistance is still up. The recent box that I have drawn, if Samsung can break above it, then it will likely go higher in the near future.
Charts with the Freestockcharts.com label are courtesy of Freestockcharts.com
Charts with the investing.com logo are courtesy of Investing.com powered by Trading View
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