Tuesday, September 06, 2005

Watch list for 9-6-05

Here are charts of the best low-risk buy opportunities that were identified by my market homework software this weekend:



Probably my favorite chart setup on the list is GEPT. This is exactly how I like to see a big rally cool off. There are a lot of people who paid too much for shares in late July and early Auguest between $5.50 and $7. These holders are in a very tight spot right now, many are scared or bored and ready to sell. I like to take shares off of these peoples' hands when the volume really dries up during the sell-off, just like GEPT has done over the last month. Take SPIR for example, we saw almost the exact same setup near the 50-day moving average (red line) in early August, just before the stock gapped up into a 50% advance within a single day.

It will be interesting to see how the market closes this week. With September 11 occuring next Sunday, it will probably be the riskiest weekend to carry equity positions through, so I expect the market to close lower on Friday than it opens Tuesday morning. It isn't worth trying to make money from these sorts of expectations though, at least I've never had much success with them. Rather, this is my que to not jump into any marginal plays this week.

5 Comments:

At 12:48 AM, Anonymous Anonymous said...

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Posted by Rachel Neumann at 9:09 PM on September 5, 2005. Mike Davis wrote a piece last year about a hurricane catastrophe in New Oreleans.
Great read! Nice site you have here.

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At 4:17 PM, Blogger jwu said...

do you think GEPT will try to fill the gap before rebounding?

 
At 4:26 PM, Blogger jontait said...

It certainly could but I would be surprised. A 50% bleed-out on an uptrending stock doesn't happen very often, and there doesn't seem to be many sellers left judging by recent volume.

I won't argue that buying here couldn't be premature because it might turn out to be.

 
At 8:29 PM, Blogger bumby_lansford said...

Nice site you have here. I am a holder of both FOXH and MNTA and was wondering what you saw in them that made them low risk entries. I am guessing the current relation to the 50dma is a big factor? Thanks.

 
At 11:13 PM, Blogger jontait said...

50-day moving average, low-volume pullback, and strong, predictable uptrend are all key reasons why I like these stocks. Glad you like the blog =)

 

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