Registered User
Joined: 7/16/2006
Posts: 14
|
Hi Kokoda,
based on the recent action(or the lack of it:) in ZVUE, what would you suggest... get out of the stock ? or hold on if one could ?
Do you see any support levels for this stock ?
Thanks in advance,
Any comments welcome.
Best regards
Amit
|
|
Registered User
Joined: 12/8/2004
Posts: 1,301
|
I know you didn't ask me, but this is EXACTLY the kind of stock I was talking about in a previous thread. The stock had absolutely no volume and was manipulated to bring it back up so the remainder of the people could get out of the stock at a profit. It is a failed ipo, and a young one at that. Every system I have says this stock is going lower. If you hold onto it much longer you might be able to use it as wallpaper. It is very difficult to predict the movement of a stock like this. I suppose you could hold this to its last support of 3.50 but I doubt that support will hold.
|
|
Registered User
Joined: 1/12/2006
Posts: 296
|
A very typical action is buying high and selling low. You, me, and most individual "investors" should add to their buy/sell plans the extra step to identify if we are buying at the high or selling at the low (getting chased out - emotional panic).
I would not sell. The recent low = 3.55; The recent high = 4.24, ignoring spikes. The 50 day SMA is in the neighborhood. Taking a step back and looking at the chart, I see a 62% retracement. Just playing the odds, this is a buy, not a sell. This is where patience comes to focus. You have to be willing to suffer the risk (give some wiggle room) after a buy.
For a lower priced stock, the volume is pretty good (how many low-priced stocks can compete with COMS in terms of volume?).
|
|
Registered User
Joined: 7/16/2006
Posts: 14
|
Thanks for your comments!
It touched (and briefly breached) its near term lows of 3.55, do you see any support around ?
Thanks again!
Amit
|
|
Registered User
Joined: 1/12/2006
Posts: 296
|
Support still at the 3.55 area. A small spike below is ok, anything after that is a sell, because then it goes to 2.55. The 3.55 are also has a mini double bottom from 12/27 - hope it holds.
|
|
Registered User
Joined: 12/8/2004
Posts: 1,301
|
What you may want to ask yourself is "Can my assets be deployed elsewhre where there is a higher expectation of profit"? If the answer to that question is yes then get out, if not, wait until your support is breached.
|
|
Registered User
Joined: 1/12/2006
Posts: 296
|
HNC
As I alluded to in another reply, it is typical investor behavior to buy at the top and sell at the bottom. If amitrseth sold now, he could easily be selling at the bottom. I've accomplished this same stupidity many times over the years, so I know first-hand what it is like to be typical.
Because this stock has had a 62% retracement, the odds favor it going up, rather than down. Actually, if it show signs of life in the very near future, I will be greatly interested.
|
|
Registered User
Joined: 12/8/2004
Posts: 1,301
|
Kokoda, I agree with your assessment of the situation. The stock has held resistance so far so there is a greater chance it's next move will be if that support continues to hold but when will it go up is another matter entirely.
Everything depends on your time horizon which the thread originator did not mention. If he is a short term trader he probably could have made the money he is going to eventually make in this stock during the last two great days the market has had. It could be 6 months before this stock makes a significant move. Let's just say this is the only stock he invested in and he is really counting on making money this year. Are there better opportunities out in the market right now with greater expectations than this stock? Are there any signs this stock is making a comeback? etc.
Just food for thought.
|
|
Registered User
Joined: 1/12/2006
Posts: 296
|
I generally agree with your point, but I think it is more applicable to the hopefully normal situation where you buy, the stock goes up, and at some point you sell, thereby relinquishing assets for further buys.
Yes, I did not like the fact that it did not go up today; but, there are other good stocks that I monitor that did not go up today. Go figure. My hold is predicated upon sound technical tactics.
amitrsethi.........make sure you read my post on COMS in the Strategy area. No guarantees, of course, but it has great potential. I may put in a buy next week - might even put in a limit order for $4.97. COMS report date is in March?, so we have time -don't rush.
|
|
Registered User
Joined: 7/16/2006
Posts: 14
|
Thanks for your comments Kokoda and HNC, really appreciate the discussion and the comments (I had replied to this post last nite, dont know why it did not appear)
I started buying ZVUE when it was high 6 range, then made another mistake lot of small investors make - average down. Averaged the price down to about 4.80 range, but have about 80% of my capital invested in ZVUE. Do other trades with the pending 20%. When I see days like yesterday (5% down and breach of only support), get a bit panicky seeing the capital erode.
On the negative side, the volume has been consistenly slowing up. The stock cannot seem to hold on to any gains made due to PR. Dont see the stock on a lot of radar screens.
On the positive side, the management is agressive and is acquiring dot coms, the revenues could exceed expectations and cc should have some price action going around it.
Once again, Kokoda and HNC, thanks for your comments. If any price/action/event triggers a buy or a sell for ZVUE in your systems, please let me know and I would really appreciate your comments.
Kokoda, thanks for the COMS heads up.
Best regards,
Amit
|
|
Registered User
Joined: 1/12/2006
Posts: 296
|
amitrsethi.............this is for you. I'll help you a little, but first the bad news. And please take this in a positive manner. Your situation appears to be as follows:
1. You are undercapitalized to be playing the stock market.
2. Your market/trading knowledge is limited.
3. You are "gunslinging" by placing 80% of your trading capital on one play.
4. You do not understand money management principles (position sizing and risk), both of which have to be defined in your written plan before you place an order.
Now the Help:
RISK = the predetermind amount you can lose based on your predefined exit point. You should not place more than 20% of your capital on one play. The risk amount should not exceed 2% (preferably 1 1/2%)of your total capital. If your capital is $5,000 and you make a buy worth $1,000 (20%), your risk amount is .015 x $5,000 = $75. Your immediate thought might be negative due to the small amount allowed for a loss, but it accomplishes good things for you: keeps you in the game; gives you a lot of practice with charts, determining your risk levels and determining support points, and will make you a better trader.
The procedure: Review your candidates from your Scan for possible support points (there are many methods for this) and then compare your intended buy point vs the support point and if it exceeds, in this case, $75, then you are to discard that stock as a play. Keep reviewing until you can find a suitable candidate that meets your risk level. When a trade goes aginst you and hits or goes below your "risk stop" (money management stop), then sell without hesitation - use closing prices for end of day trades (position trading). As a stock moves up, then you adjust your exit point - you have to make a decision on this,
whether it be a trailing stop loss or other.
----------------------------------------------------------------------------------------------------------
Your first objective is to make your trading capital last through the learning process. Starting small is a great way to reduce your risk, learn to trade with smaller positions and build up some confidence, before you enter a more demanding environment - give yourself a good year in this mode.
|
|
Registered User
Joined: 7/16/2006
Posts: 14
|
Thanks Kokoda for your comments and time...
Best regards,
Amit
P.S> for ZVUE, hold for now. sell if goes below 3.50 range ?
|
|
Registered User
Joined: 1/12/2006
Posts: 296
|
My reply on 01/11 still holds and will not change until it gets over 4.00.
|
|
Registered User
Joined: 10/7/2004
Posts: 264
|
80% in one position!! Get out now. You should not be in this trade. Good luck.
|
|
Registered User
Joined: 7/16/2006
Posts: 14
|
Golfman-unsolicited and non technical comment! have fun
|
|
Registered User
Joined: 10/7/2004
Posts: 264
|
Amitrsethi,
I am sorry you don't like my non-technical comment. However, you have three posts regarding this stock -- all essentially asking if there is further downside. It is clear from these posts that you did not set any exit point when you entered the trade. You now hope that the decline will somehow stop and ease your pain.
Do the math. Rough guesses -- If you loose 50% on this trade, you stand to loose 40% of your total trading capital. To get back to break even, you need a 67% return. Not an easy task.
At best, the stock has 5 months of trading activity. IMO not really enough data to draw any conclusions from a technical point of view. True support is not until the 1.19 level.
You admitted above that you made a mistake. What you do with that knowledge is your decision. Hopefully others can learn from your experience. Good luck.
|
|
Registered User
Joined: 7/16/2006
Posts: 14
|
Thanks Golfman for your comments.
My questions were not just bottom fishing but getting different perspective for reading the charts. This particular stock could go higher or lower but my point was to get a take from experts.
I am not down 50 % on this trade, and hopefully would not be in that situation.
This stock has 5 months of trading activity, thats what makes it very difficult to trade. I admit it was not the best stock selection, but am hoping for a good exit point and wanted opinions from worden users, particularly Kokoda - I have found his posts very intelligent, independent and often times right
Best regards,
Amit
|
|
Registered User
Joined: 12/8/2004
Posts: 1,301
|
You need to determine your risk tolerance for every trade. When it hits your tolerance you need to get out no matter what the chart is doing or the experts think, because ultimately no one knows where any stock or market is going. Read up on money management, and good luck to you.
|
|
Registered User
Joined: 1/28/2005
Posts: 6,049
|
Your goal as a trader should be to trade stocks that meet certain
standards. If a stock is "hard to trade" you should not be in it.
Whatever the problem: poor earnings, no trade history,
low volume, poor fundamentals. If a stock fails to meet
quality requirements you should pass on it. There are
thousands of stocks to choose from. There is no reason
to chase a stock.
Good Luck
Thanks
diceman
|
|
Registered User
Joined: 1/12/2006
Posts: 296
|
The Golfman25 comment 01/14 post "Get out now" was based on being in an 80% position, which as we know, is not a good thing.
However, we are where we are, and evaluation is based on the NOW. Ref. with my comment on 01/11 (odds are that selling now would be selling at the bottom), you should not sell now.
What one in this position should do is lighten up, but do it with a smarter approach. Since we have a decent average high/low spread , place a "Sell Limit" order for "x" shares at "y" price (up to owner). This is simply to reduce the big exposure to one stock. Else, this is not a sell.
|
|
Registered User
Joined: 3/21/2006
Posts: 4,308
|
Just another point of view (I hope it helps).
It deals with fading volume in a consolodation pattern such as this, I am looking at zoom 7 with volume and a 22day ma.. Notice the steady decline in the ma line. I have studied a bit on technical analysis, and fading volume in a consolidation pattern is not good..
I only suggest that maybee a tight stop loss is in order here..(maybee $3.50) just to protect yourself..
I am rooting for for your success..
Good luck..
Apsll...
|
|
Registered User
Joined: 4/18/2005
Posts: 4,090
|
amitrsethi
I am not a pro at trading but I would like to say that you should consider papertrading first. some people say this is silly but had I not papertraded first I would have lost 2/3 of my trading capital in the first month. Actually I didn't paper trade enough but I was imediately proffitable when I got most of the kinks worked out of my aproach. another thing is that I personally never enter a position with more than 5% of my cash capital base and I dont exceed 15% in positions I have added to. also you need to learn about support and resistance, as well as order types that give you better odds and lower risk.
I personally never average down and think this is silly advice.. unless you are taking LONG term view then a couple of months and weeks movement is irrelevant and you will make out better....in some ways. but for that you need to know the company, read their financial reports yourself,, think and consider their sector then as a company and all the fun fundamental stuff I hate. I do average up on occassion. The logic is simple.. I'm buying more of a stock that is continueing to show strength...in the long term. At some point I decide to take proffits..either when I see signs of weakness or when I reach a target price.. achieved through an understanding of support and resistance.
However ZVUE interests me if it can move off this point. My aproach would be use a good till cancelled buy Stop order a little above price action now with a stop under it to controll risk. doing this ensures that I am buying into strength. I generally don't play IPO's untill they have formed a clear bottom... I may be interested in one for a while and research it and watch it for months before I ever decide to buy it.
also every trader will see things a bit differently. I take riskier trades than allot of people.... but I cut them when they turn on me... usually. Holding and hopeing is terrible emotional rollercoaster and anytime you let emotions get the better of you you will be playing right in to the hands of smarter money. I personally take any extrordinary gain I'm given.. such as 11/15 on this chart.. I'd be out and not looking back. Buying after such a gain is asking for trouble. this is not the late 90's where stocks could continue to run and run and run some more.
There is ALLOT more to trading than looking at a chart and buying a stock. Previous poasts mention a "plan" and this is essintial. set rules for your self reguarding what tyes of stocks you will buy and how you will enter them. Papertrade that strategy untill you feel confidant and then go live. I hope this helps.
|
|
Registered User
Joined: 10/7/2004
Posts: 264
|
[quote=kokoda]The Golfman25 comment 01/14 post "Get out now" was based on being in an 80% position, which as we know, is not a good thing.
Kokoda,
That was absolutely part of the basis of my advice. While I agree with your analysis regarding the odds and lightening up the position, one adverse move down and she/he has a substantial loss of trading capital.
The other part, which I didn't clarify at all, was my own "rule" to get out of any position in which a mistake was made or an unforeseen problem develops (ie; my plan needs to change). Exit without further question, analysis, hoping (been there), praying (done that), etc. Take the loss and move one. After I am out, I can review the circumstances unattached. Good luck.
|
|
Registered User
Joined: 12/8/2004
Posts: 1,301
|
QUOTE (Golfman25) [quote=kokoda]The Golfman25 comment 01/14 post "Get out now" was based on being in an 80% position, which as we know, is not a good thing.
Kokoda,
That was absolutely part of the basis of my advice. While I agree with your analysis regarding the odds and lightening up the position, one adverse move down and she/he has a substantial loss of trading capital.
The other part, which I didn't clarify at all, was my own "rule" to get out of any position in which a mistake was made or an unforeseen problem develops (ie; my plan needs to change). Exit without further question, analysis, hoping (been there), praying (done that), etc. Take the loss and move one. After I am out, I can review the circumstances unattached. Good luck.
Excellent advice.
|
|
Registered User
Joined: 1/20/2007
Posts: 8
|
amitrsethi,
You did not ask me for comment but if you are not out of the trade already, get out ! No support untill 2.80s per me..
cheers!
NK
|
|
|
Guest-1 |