I've been posting day to day action from a chart perspective (so please skip this if you're not interested in technical analysis) on the Yahoo! board and thought some people here might also like to read it.
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Amid these boards and others on the Web, there has been mass pessimism over NITE's action Friday. Bears are rejoicing thinking that this is, "The beginning of the end," as they've told us on numerous occasions before.
The skilled analyst, the one that doesn't accept how things appear but digs deeper to find out how they actually are, will recognize three key points from Friday's sell off. I've listed them below for the benefit of NITE bulls that may be rethinking their strategies as NITE bears who may not want to hear how it is.
* The stock is still in a series of higher lows and higher highs. The last rally took the stock up to $60. We passed that when we hit $64 on our most recent rally. The last sell off took the stock down to $49. If the stock can turn around on this sell off before $49 (probably around $55), we will have confirmed the uptrend because the bears are getting weaker.
* The On Balance Volume is still at a new high despite the fact the stock is 27% off its high. Friday's volume was not as strong as last Thursday's Volume when the stock hit $60.
* The 20 Day moving Average, the best predictor of short term movements, is still below the stock price. In other words, the stock probably will find support at that average (around $55) and bounce off it to move up.
I've traded NITE before, back in March and April, and I know how it trades well. It always makes a strong move to shake out weak hands before the big upmove. For reference see, late March's dip to $24 (post split) before the double, and late April's dip to $35, before the double.
Note: Trading is a zero sums game. For every winner, there is a loser. Therefore, for any stock to move up, it requires a host of Losers, people who are betting the wrong way. As such, NITE is fortunate to have a ready supply of them. Simply look at the sentiment of this board to determine if there's a sufficeint supply of people betting the wrong way.
And there is...
Conservatively Yours,
Raymond J. Norris |
