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Registered User
Joined: 10/31/2005
Posts: 5
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Hi I picked up shares of NTRI on 11/3 @ 32.73 and sold them today at 32.43.
My reason for buying:
Based on fundamentals.
In the interim:
I spent a lot of time learning to use TeleChart over the last week and 1/2. After reviewing several of the worden reports/stock comments and forum topics on Money Mtream (MS) and TSV I decided to sell the stock.
My reason for selling:
I noticed that the TSV18 has crossed below it 10 day moving average (a leading divergence??) and MS was pretty much flat on the daily chart. Given that the stock is way above it 50 day moving average of 27.08, I concluded that this stock will most likely pull back based on the the TSV direction and how far above the moving average it was.
My Question:
Was this a correct sell decision? Was my analysis of the chart pattern flawed? The company still passes my fundamental analysis (CANSLIM) but the technical analysis said SELL to me.
Should I wait around and keep it on my watch list until it does a correction to get in at a better entry price?
Thanks
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Registered User
Joined: 5/17/2005
Posts: 221
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NTRI seems to be consoldating right now. The hourly chart shows that it has support at 32.26 and resistance at around 33.06. I would wait for a break out above the 33 level on good volume. This could be on the hourly chart. The other option is that if you feel really good about the fundamentals then place abuy just above support at 32.3, hope for it to pull back to that level and then play the bounce. Of course this may not happen and it may go through the support, however this stock is in a very strong up trend and nothing yet indicates that this is about to chnage. I would use the stochastic or cci to pick your entry point on the hourly or daily chart. (look for oversold conditions)
This is also forming a very nice ascending triangle on the daily (my fav chart pattern) look for volume brekaout above that 33 level
Good luck
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Registered User
Joined: 1/1/2005
Posts: 2,645
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atfraser,
Unfortunately (or, maybe fortunately), you got bit by a Simple Moving Average. Since you did not like the looks of TSV18 Simple, a switch to TSV38 Simple would possibly have changed your mind. Actually, there is nothing bearish about TSV.
The above is not indicative of a problem with TSV, it is a property of Simple Moving Averages.
Thanks,
Jim Murphy
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Registered User
Joined: 12/19/2004
Posts: 457
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Hello,
The first thing I'd advise you is to look at a chart on multiple time frames.
The monthly chart shows a strong uptrend. The Rate of Change indicators I use show all of them are overbought, and the stock is touching the upper band on the monthly. Considering how long the stock has trended up, I wouldn't be enthusiastic about buying now.
There is a case that could be made to buy, based on the strong trend, though. Lets look at the weekly.
Again, I see 2 overbought momentum readings, the stock tagging the upper band, and a short term negative divergence. This suggests to me that the trend is closer to a top than a bottom.
The daily: Price appears to be making an ascending wedge(bearish); all the momentum indicators I use look overbought. Volume is declining at this new high price. This is more evidence for the bearish case.
Keep in mind that a momentum divergence does NOT mean to immediately sell. It does mean to me that I should expect the TREND (ie. moving average) to turn down in the next few months. If there were 2 divergences on 2 different time frames, then I'd lean more towards selling, or at least putting a tighter stop.
In my opinion, I can't fault you for being a bit uncomfortable about NTRI, but it is not out of the question that the stock may make one more new (minor) high before dropping. I think you did OK by selling, but your analysis was not thorough enough.
For my philosophy on using indicators, take a look at the April 6, 2005 Worden Report. Don Worden published my technique of incorporating momentum indicators with Bollinger Bands to set price targets and stops.
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Registered User
Joined: 5/17/2005
Posts: 221
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rmr ...disagree with you on the ascending wedge ...looking closer at the daily chart from mid October to now, it is forming an ascending triangle that is bullish. Also BOP and RSI is increasing over the last few days. There is room for movement to the upside in the daily chart ...looking at stochastics 7,3,3 for short term and a custom CCI indicator. Weekly there is also some room for this stock to the upside. Monthly though I do agree with you on the being overbought. I think that it might break through the current level and trend up to $40 ish, but this will only be a short term high.
All I can really say is I wish I had bought $10,000 worth of this stock back in 2002 at $0.5
RMR ...I am interested in the April 2006 report and will have a look.
Good trading out there !
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Registered User
Joined: 10/31/2005
Posts: 5
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Thanks you all for the insightful answers. The moral of the story, I still have a lot of learning to do. I have done a lot better this year by using CANSLIM and adding Telechart to my arsenal.
Any recommendations on the video training material on worden.com site?
--bar2k
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