Sunday, January 18, 2009

Looking at Some Picks

I thought I would share some more on how I look at picks. Three potentials fired off for Monday include BGG, CAI, and MCO. I started by looking at Yahoo Finance for something on each one. BGG showed some new star ratings of 4 and 5. This stock also recently topped wall street forecasts on earnings. That's always a good thing. Looking at CAI, I saw some new contracts it had recieved, and some good looking financials. It's a money-maker. MCO showed a history of EPS surprises. Very good. I then opened each one in Amibroker to look at some charts.

BGG shows a dive towards resistance of around $14 which is where I placed the red dotted box as a possible Buy Zone. The %K shows that it is oversold and due to bounce. The dotted red box shows the area where we would expect to see a bottom and a turn. Notice the volume bars outlined showing heavy selling far above the 50 day moving avg. for volume. The price movement and vol. in the short term is bearish,but technically it is due for a bounce.The weekly Bongo shows good momentum. I also threw in the pattern explorer recognition showing a bullish expanding triangle patter

CAI shows a pullback towards the 100 day moving average of $44.50 which is the buy zone indicated by the red dotted box. The %K is above 70, indicating that it is oversold and may retract some more, but if you notice its history, it never seems to make a full retracement before rising again. The Bongo weekly also shows good momentum. Pattern Explorer also shows a bullish rising wedge.

MCO shows a lateral move across a very predictable price channel indicated by the black dotted lines with a buy zone indicated by the red dotted box. %K has a dotted red line showing possible retracement, and the volume bars have shown heavy selling well above the 50 day moving avg. for volume. I would not expect it to fully retract due to the previously mention price channel action. Bongo again shows a good weekly momentum,and the patterns show both a rising wedge and an expanding triangle.

Again, I hope I have given some insight into how you can technically break these picks down. There are actually several more charting tools that I use, but it would take several pages of blog and illustrations to show them all. The one thing that I love about Stock Assault is that it spots stocks BEFRORE they make a move up. Too many other software systems have gotten me in during the middle or at the top. In summary, the stocks I have reviewed are more of a lesson in how I look at stocks, and when I would enter, and are not reflective of how you or someone else would do it. I am most likely wrong on BGG moving that much lower, but I play it safe a little too much. While good charting software is a plus, it is not required to use SA; it just like a security blanket for me.

Have a good one,
Roger
























2 comments:

  1. Hi Roger,

    Today's picks BGG, CAI, and MCO are the first I have received since installing SA. How do I know what the target purchase price SA recommends me to buy the stock at.Or is it just what the stock opens at that day. I didn't make a move on any of them today because I didn't see it until market was closed but all 3 picks headed downwards today. When this happens am I in even better position to buy them the next day? I'm completely knew to trading and don't know much of anything when it comes to terminology. Could you point me in a good direction for information so I can get the best use of SA

    Thank you

    Saffi

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  2. @Saffi
    Generally SA picks are for the next day with a market order at open. When the market tanks, and the prices of the picks go down, you are in a better position to enter. Today looks like a down day also, so I would be hesitant to take a position until the market shows some strength. Many times I will wait untill the market is finished dropping. The negative fall this morning could quickly turn positive, however, so watch for that to happen mid-day.

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