Here's a little bit of background info … stock splits are tools businesses use to raise more cash. They increase the total amount of shares in the market, which makes the price cheaper for each share. And that cheaper price will lure in new investors/traders.
One of the most common questions surrounding stock splits is … how do we trade them?
Here's a video with a lot of good info …
This is our best advice … trade the momentum before or after the split.
No one knows what's gonna happen once the split happens. But it'll likely decrease in price. Whether or not it bounces back is another question.
But for some hints, we can always look back and see what happened last time TSLA split its stock.
Here's a chart, we drew a little circle with arrows pointing at the last split …
That split was a 5 - 1, which is more drastic than the proposed upcoming split of 3 - 1. Keep that in mind while drafting a trading plan. The movements might be less volatile.
See how it's bullish before the split, then the price falls and breaks out a month later?
Take notes …
Agriculture Sell Off
Global inflation pushed prices through the roof.
It affected everything, from oil & gas to food and toiletries.
When the inflation alarms were first sounded, hedge funds scrambled to take advantage of rising prices.
The FED has been raising interest rates to lower inflation. And there's evidence of it working.
An agriculture sell-off could also signify the end of an inflationary period. Hedge funds are cashing in while the prices are high in anticipation of lower future prices. Or perhaps tough economic times for businesses.
It's important to recognize macro trends because they help us gauge where the money is. That's where we're most likely to profit.
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