Paul H. Cootner - Price-value Interaction Model

Though the stock market in the recent past made desperate attempts to move up, the movements were always restricted within a range. As per this theory, there was an "upper resistance barrier" which it could not break. The "naive" investors pushed the market towards the barrier and as soon as it reached the barrier, it came down crashing on account of selling by the "professionals", as the intrinsic value" had not changed. The fact that the market has sailed past the the previous upper resistance barriers indicates that the professional are willing to hold at higher prices due to the promising future.

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