I apologize for things being so slow around here the past couple of weeks. The end of the semester’s upon here at UF (Tim Tebow for Heisman!) and as a result deadlines tend to build up. With three deadlines by Thursday, things will become almost unbearable here. That being said, everyone needs a break so I submit to you some reading material for the rest of your Sunday. Enjoy!
Enjoy the rest of your Sunday. Back to work tomorrow!
As some of you know, I’ve been a fan of EMC both on the ride up, and sadly, on the ride down. So here’s my first attempt at using technical analysis to figure out where, if I were to invest in EMC, my entry and exit points would be.
Here’s a recent graph of EMC with some notes I’ve made:
There are two things to note on the graph. First, I’ve highlighted three points in a gray oval shape. From what I’ve learned so far about TA, it appears that EMC is showing signs of an inverse head and shoulders pattern. The left and right ovals show the shoulders of the graph while the huge dip near 17 would be considered the head.
Now take a look at the horizontal line I’ve drawn near 20. This is considered the neckline if EMC is truly showing signs of an inverse H&S. It’s also a large area of resistance heading back a few months during the VMWare spinoff.
So if I believe that this is an inverse H&S (a bullish pattern), how would I trade it? I’d first make sure the resistance / neckline is broken on good volume as compared to days and weeks past. Volume is important when breaking resistance as it can help show whether or not the resistance level will turn into a support level. if EMC does break through 20, I would pick up a position with the intent of closing the position if EMC were to drop below the 20. This is what’s known as the REE for all you Option Addict readers out there. An REE is short for the Raimo Entry at Exit. In other words, if the trade goes awry, you can exit with minimal loss.
So there you have it. That’s my first solo attempt at TA. Do you agree/disagree with the assessment? Let me know!
Damn DNS servers going down… grumble…
Anywho! I received an email from IBD (Investor’s Business Daily) with an invitation to their open house on Investors dot com. They’re giving free access to the entire site until Dec. 9th. Enjoy… frolic in their stock screens and other tools. They also run different trials, but be prepared to have at least a phone call a day from them after your trial’s over if you don’t sign up. They’re extremely persistent hah!
It’s time for another edition of Weekend Reading! I know most of you are probably out holiday shopping and may not have enough time to read most of the articles, so I’ll try and keep it as short as possible.
- There’s a reason why I started to distance myself from Mad Money and Jim Cramer. Even though his shows and books got me involved in the world of investing, I’m happy to see that my thoughts on him constantly switching positions aren’t just my own. I know, you must be flexible while trading, but make it perfectly clear on your show.
- StockTradingToGo has recruited a number of investors to help with the commentary on his blog. Here’s a TA on market direction, although the potential Fed rate cut may be violating quite a few TA rules out there.
- Here’s a Top 10 Business bestseller list compiled by WSJ presented by The Big Picture.
- The 64th Festival of Stocks can be found here!
- This is why I’ve been hanging out on Option Addict dot net. His NVDA call alone brought my portfolio back to near even in less than 4 hours.
Enjoy the rest of your weekend!
