The most amusing thing about the CBA TA thread is the lack of TA!!
It appears the waves have crashed on the beach and the bears have retreated to the safe haven of FA.
Basic numbers would indicate a correction must come at some stage, so not sure many don't believe that.
The real question is how far it will retreat and the TA boys seem to have abandoned the crystal ball.
Buying and holding is a legitimate strategy where you ignore the peaks and troughs (or buy in the dips) and the inference that people that do this somehow don't understand the market is condescending and naive.
Many holders will have gone through many cycles so understand full well.
Of course it is quite a different story for traders who try and pick the tops etc but reality is many of them just keep chasing their tail. (Also different for those who leverage shares and get caught having to sell.)
Little doubt we will see CBA (& the other banks) at lower prices, usually because of one of 3 things -
- black swan event, whole market goes down (winners are usually those that don't have to panic sell plus have some cash)
- Sector sentiment change. No doubt banks have been in favour in last couple of years and a move to whatever shiney new sector will probably see cash moved and banks retreat to a more average pe (and of course CBA is highest). (Reduced divi return included in sentiment category.)
- Company scandal - Always best to look at these events in the cold hard light of day, rarely a company killer and recovery can be quick, best not to follow the lemmings over the cliff until you know how material the scandal actually is.
Always worth remembering that many companies get overbought on the way up and most certainly oversold on the way down.
Anway good luck to holders, no doubt CBA has got ahead of itself but plenty of money keeps pouring in and as someone said earlier there are many holders who $20 or $30 a share means very little!
I have attached a simple chart with a trend line over past 25 years or so which is pretty clear (& yes, others may draw that trend line slightly differently but I just tried to take out some of the spike before the GFC and certainly the short term spike in 2015).
I know TA people like to be a lot more technical than this but for mature businesses, like our banks, trend lines probably tell as good a story as any.
Anyway, just thought I'd post it as it is a TA thread
(20min delay)