Resistance in stock sentiment...goes both ways, up and down!

FULL DISCLOSURE: My dream is to be more like Warren Buffett and Charlie Munger from an investment perspective. Low and slow, steady and/or near zero growth in the short term until eternity, I am just not there yet!

Hence, I discuss short/midterm stock strategies to help my stock positions/decisions/choices evolve. Enter the term "resistance."

A great aspect of this volatile market is that it's like learning to sail a boat in rough seas. One has to adapt, adjust, and learn rather quickly or get fed to the dogs.  The idea of resistance in regard to a stocks movement up or down helps me to stay on course. 

TRUE: one should think of a stock buy as a marriage with committing to a company. Similarly, shorting is committing to a divorce of a company from its' shareholders. That's why I would bet that Warren and Charlie take into account the idea of resistance prior to entering a long position. 

The idea of resistance for a stock up or down, depends more on ones sentiment that your thesis about the future of a company is accurate. A simple way to gauge resistance is tracking if a bullish position stays steady in down markets. Similarly, do your short bets continue to head down over time in down markets?  Does your sentiment towards a company/stock reflect the movement of the stock in less favorable market conditions?  This will help you wiggle in or out of a position for the long term.

I typically do my valuations based on overall financials and time.  How has a company held up or 5 years, 10 years, prior to Trump's tax cuts, things like that. Then, when I commit to a companies overall good or bad health, I will estimate the bottom and high limits in "real time."  When I estimate a bottom or top number for a stock, I will generally discount this number by 3% - 7% or even more depending on the type stock in question, then stake out my entry/exit from there. I generally use +11/-11% as a basis to consider entering a position or exiting. (Stocks and Options). Hence the name of this blog 7net11.com.

IN CONCLUSION: The idea of resistance, and the variables one feels comfortable using to keep the ship on course, is a great tool for positive gains, in the short and long term!