| chavanu |
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Gold User, Member, TeleChart
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| Saturday, February 26, 2005 |
| Sunday, August 6, 2006 9:13:38 PM |
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QUOTE (timcomzsux) <img src="/training/images/emoticons/smile011.gif"/>I am getting killed in GRU, please offer some technical analysis on this. Is there any support? Help...
The previous posts are right. A tighter stop loss should have been used. However, I have fell victim of that myself. There are a few things that you can do. If you are feeling too much pain, get out of the stock. Here are some other things to consider. The stock blew past the 20 day moving average. The stock is nearing the 40 day moving average. Many times a stock will find support at the 40 or 50 day moving average if support doesn't exist at the 20. Also, this stock screamed higher over the past month. Keep in mind that for every action there is an equal reaction. It is healthy for the stock to retrace 38% to 50% of the prior move. Right now, your stock is about at the 50% retracement. Anything below 50% would spell trouble. Your stock has moved very hard down over the past 3 days. Stocks tend to only move in one direction a max of 3-5 days before they will change direction or consolidate. If they move down more than 5 days in a row, you could have a change in trend direction. Finally, it appears that the stock moved down on a typical volume climax. You had explosive volume during the move. When the volume dried up the stock price fell. I would watch for these type of signs in the future. If it were me, I would have set an intial stop loss at $21.00 to $21.10. This is just below the support that existed on the up move. In the future, I would look for these key levels of support and resitance and set your stops below them or above them if you are shorting. Please keep in mind that stocks tend to move downward 66% faster than they climb.
Good luck. Let me know if you have any further questions.
Pat
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