Does The CHART Look Good or Bad? Can You Guess the Stock?This is a WEEKLY mystery chart of "XXXX"
There are times when I am going through a list of charts and I am so focused on the candles that the company name doesn't even register until I consciously look for it.. Does this ever happen to you??
This is one of those charts. I have looked at this chart for several weeks now. Each time, if I have a very recent history showing, I comment to myself that this one is looking ok. Then I look at the symbol and I talk myself out of the investment. In retrospect, I talked myself out of a 10% winner. And that is only since the beginning of the year.
Much of the left side of the chart is not included here. Much of the media coverage of this company is not favorable. But someone is buying it...
How do you handle situations like this? Do you ignore the symbol and just look at the chart? Do you take a chance on it even though just saying the company name or its symbol leaves a bad taste in your mouth? Do you skip over the chart because you paid attention to the symbol?
Here is what I am going to do. I am going to invest in this stock if it closes above the horizontal resistance line. At the time I invest, I will set a stop loss a little under that same horizontal resistance line. This will keep any losses to a minimum. I understand that my stop may be too tight but I am ok with that. If I get stopped out and then the stock goes back above the horizontal resistance line I can always try again if I want to.
For those of you saying, "you could set your stop loss at the green uptrend line". You are right, I could. But I won't. The green uptrend line is currently 10% or more below a potential entry price. If the investment doesn't work out, I could lose 10% or more. That is just too much for me. I would rather lose a couple commissions and maybe 2-3% of my capital if the stock doesn't cooperate.
If you also want to try this investment, please, be my guest. But you will have to figure out the symbol first. If anyone puts the correct symbol in the comments to this post I will let everyone know puzzle is solved. If you just have to know before everyone else, just ask and I will PM it to you. This little exercise is supposed to put a smile on your face. Not make you want to pull your hair out.
Trade What You See! Not what you think, or feel, or hope, or ...
This is a great rule for technical investors but it can be a very hard rule to follow at times. Hope you are having a great weekend.
I guess I didn't get rid of the name of this company after all. Or maybe TradingView doesn't allow "Mystery Charts" :)
Oh well. THE MYSTERY IS SOLVED.
** March 9 Update **
This morning BBRY has opened down. Now you have another way to play this stock. And this time, it is even more cut & dry to me.
The green uptrend line is at about $9.75 ish today. The stock is trading just above that price as I hammer away at my keyboard. The green uptrend line defines the uptrend. So if I was invested in this stock, my "line in the sand" would be the green uptrend line.
At this point, If I wanted to go long BBRY, I would buy in at this level. I would look for the stock to stay above the green uptrend line on a closing basis (for the week). If BBRY closes below the green uptrend line (for the week) I would be out. As long as it stays above the green uptrend line I could stay invested.
At this point, if I wanted to go short BBRY, I would not buy at this level. I would wait until there is a close below the green uptrend line.
(If you look above, you will be reminded that I said wait up there too. High probability trades involve waiting for the trigger. Not guessing... )
Once BBRY closes below the green uptrend line I would then take a shot on the short side. If BBRY comes back above the green uptrend line in a short period of time, the short trade would be over.
