Friday, August 15, 2008

Loud Music.

Looks like the Apple setup is working as predicted. The S&P and DOW are holding above support. IntC and WM are doing well too. Today, however, I have invested in AnF. They just released their earnings and they weren't as bad as expected. I got a little excited around 54 (the green crosses show my buyin points) and jumped the gun, only to be stopped out after about 1%. I saw it coming right after I submitted the buy. For one, AnF has shown resistance at 55 and would require some volume to get through that. Second, the trend was bearish. Don't buy in until the thing makes higher lows, and eases up to break previous highs. Throwing that aside will get you in trouble. The blue going down shows the lower highs that I should have heeded--if a stock is strong buying into it with greater certainty is worth the difference in price. Oh well, stops are your friends.

There are some other things in the chart that should have stuck out too, though. The volume near 54-54.5 is large. If there is large volume followed by a drop in price, avoid the stock for the moment. Especially if the volume continues to drop off. The drastic upticks at the beginning of the day are also something to look out for. Such drastic jumps are normally followed by a drop or a plateau, either of which don't cause loss if immediate action is not taken. The crossover in the MACD at 54.5 is not good, nor is the extremely oversold condition taking place around 55.

Anyway, something that I like look for are steep advances or declines. They seem to indicate a change in perspective. I waited until after the one in red and bought in at 52.38 but a good buyin would have been 51.90, as indicated by the drop, with a stop at around 51.38 (about 1%).

The daily chart is interesting. The red lines are support/resistance. I'd look for significant resistance at the 50, 100, and 200 day MAs. I'd like to see it get to 65 or so, based on the advances that other stocks in the retail/discretionary spending sector have taken.

The stochastic is low on the weekly chart, while a higher low has been formed. The new low would be the new support. Should it be broken, which seems unlikely given the decent earnings report, watch out.

As always, do your own research and take responsibility for your own trades.

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