This article was inspired by a Bruce Lee quote noted below:
"I fear not the man who has practiced 10,000 kicks once, but I fear the
man who has practiced one kick 10,000 times. "
This lesson is not speaking to your traditional “buy and hold” investors. Buy and hold
investors aren’t concerned with the fluctuations of their securities. They are generally
concerned with the fundamental aspects of the underlying business. Cash flow, revenue, growth, research and development, etc. For them, if the company is growing quarter over quarter, year over year, so will the price of the stock.
This phase is characterized by sideways trading action or consolidation. Heavy weights and institutional investors are buying up the stock during this period in large quantities. The goal is to accumulate within a range without alerting the general public. Levels of support and resistance are typically well defined during this phase.