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Registered User
Joined: 2/2/2005
Posts: 27
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Is AMD just in a temporary lull? I liked it enough and bought at 12.96 but it doesn't seem to have any legs and I am getting nervous. My target was to reach 15.50, then set a stop at that level. MACD is at zero, but MS and TSV dropped on increased volume today.
Any comments, please?
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Registered User
Joined: 6/6/2005
Posts: 1,157
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Hello Gatman,
After reading your post one word popped out at me -- nervous. Why are you nervous? You mentioned your target, but do you have your stop in place? Have you accepted the risk? Did you have a solid reason for entering the trade? How did you arrive at your target price? My guess is that if you are nervous it would be for one reason and one reason only -- your position is too big. Is it?
You mentioned MACD, but by your buy price of 12.96 it appears that you didn't use a positive MACD cross-over to get you into the trade so why use it to get you out of the trade?
Did you use a break of the pennant?
That would have gotten you into AMD around the 12.96 level.
I'm not a whiz with pennants but I believe their target is aprox. the top to bottom span, like this:
What also could be happening right now is that AMD has run into overhead resistence.
I have discovered something interesting on the tsv chart. Regarding the crossovers -- I have been reading a lot about relative volume lately and on the TSV chart the crossovers are on surprisingly similar levels of volume.
What would I do in a situation like this? If you're trading to heavy I would lighten the load and sell at least half. Then set my stop at either break even the, the bottom of the 10 day channel or if you really don't like AMD why not get out all together?
One last note -- I ran a backtest of all stocks up over 11% for the last year to see what they did over the next 5 days -- over 5,000 trades showed that there's a 56% chance of positive outcome but a very small average profit.
I then ran the same test on AMD alone over the last 10 years and found there was a 56% chance of success with a 2.5% average profit over the next 5 days.
Good luck. Let me know what you do end up doing.
David John Hall
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Registered User
Joined: 12/21/2004
Posts: 902
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What catches my eye immeidately is the MACD-H divergence. Compare the levels of the MACD-H on the minor price high of 9/4 compared with where the MACD-H is later when this price was exceeded. The little mini-uptrend is run out of gas. In a healthy uptrend, as the price went higher the MACD-H should have gone higher too. If you are using 12,26,9 simple, you're not going to get any help on the weekly either, as the weekly is negatively divergent.
If you use the HNC/Diceman setup with a 4 day moving average on the Diceman, yesterday was a "Decision Day" and the decision was decidedly down.
If I had to take a bet, I'd say that it's more likely to hit 12.96 again before it sees 15.50 - just my opinion.
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Registered User
Joined: 2/2/2005
Posts: 27
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Wow, thanks. Great charts and information. I still have to work on my entrance/exit strategies. I am picking better now than I was 2-3 mo ago. And no, I don't have a large position.
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