My rule of thumb:if a share is in an uptrend,go long on pullbacks to support;If share is in a downtrend,go short on rallies to resistance.A technical analyst on summit a few night ago said that he has gone short on MPC because "it can't go up forever".What a bad reason for shorting a share!It is the opposite of catching a falling knife.How exactly do you decide that it has gone up enough when it has been in an uptrend since July 2008?
My broker told me 2 yrs ago MPC was over-valued @ R 80 we need to sell. Unfortunately I listened to him - it was an important less to have learned, they might be over-valued but theres truth to "ride out your winners".
He was right though...at the time it was over-valued, so is SAB, NPN and BTI today, to name a few. Doesnt mean the price wont go further up.