Technical conditions refer to the conditions that usually affect the
supply and demand, such as short interests, floating supply, and stop
It is sometimes said that supply and demand must be equal or else there
could not be any sales, but that is not so. There are always some people
who are willing to sell at some price above the market who will not sell
at the market; and when the demand for
stock is greater than the supply,
it goes up until it is supplied by some of these people who are holding
it at a higher price.
It works the same way when the supply is greater than the demand. There
are always some people who will buy at some price below the market.
Therefore, when the supply is greater than the demand prices must go
A stock may have an intrinsic value of $100 a share and yet be selling
at $50 a share, and it can never sell higher than $50 until all stock
that is offered at that price is bought.
However, you should keep this in mind: if the real value is $100 a
share, sooner or later the market price will approach that figure. That
is why we so strongly urge our clients to buy stocks that have actual
values, or at least prospective values far greater than their market
prices, and either to buy them outright or margin them very heavily, and
then hold them until the prices do go up.
Of course, when one finds that a mistake has been made, the sooner one
sells and takes a loss the better.