Congrats to all who got in the last few days and even more to the longs from long ago.
This is just a VERY general statement when investing based on charts. You want to look for patterns that are going down during an uptrend. Those are consolidation patterns and when they break to the upside they have the best return.
Another pattern during an uptrend is a channel. That has a tendency to break downward also but is a good bull sign if the company is strong.
You do want to buy either at a breakout up, or on the retest a few days later, but buying into an uptrend, that looks like the stock is overextending can be costly.
As I mentioned, I was playing DECK to the top of the triangle where I sold half of my position. I am still holding the other half though in anticipation of an upwards breakout out of the triangle....today looked like a retracement day after yesterday's strong move.
even though based on my analysis the breakout appears it will be to the upside, the least riskiest play is to wait for confirmation of the breakout since the breakout can be to either the upside or the downside. The reason I held onto 1/2 my position before the actual breakout ocurrs is only because I was able to lock in some gains from the move to the top of the triangle. If I had not done that, I would be waiting for a breakout to ocurr to take some of the risk out of the equation before making a purchase.
I also attached a chart of the bigger picture for DECK - this symmetrical triangle is coming after a long downtrend....when symmetrical triangles come after long downtrends, statistically they act as reversal patterns more times than as a continuation pattern.
DECK 2013-01-16.jpgDECK 2013-01-16.jpg
Last edited by Limit5Bass; 01-17-2013 at 01:00 AM.
What do you guys think of NLY? I'm taking a peek at it and it's starting to interest me. The 25 day sma is about to cross the 50 after a pretty good drop that started in Sept. Additionally, the stock provides for a 12+% divy to keep you on board while the stock rebounds. Anyone have any thoughts about NLY?
A few times I have mentioned ONVO. It has had a HUGE breakout with high volume this week. Putting all my other stocks to shame. I am not sure I would get in at this level, but after it consolidates, think hard. This stock could be big. I read a recent article talking about them doing some warrants and other things to get it assets up to the level to get on the NASDAQ from OTC. Money appears to be flowing in, lots of buying. I noticed at the end of the day yesterday a few nice 8-10 cent swings that could be taken advantage of.
EDIT- up another 10% this AM to $4.73, out of control, was $2.25 at Christmas. Holy Crap!
Last edited by radejs; 01-18-2013 at 10:46 AM.