<AMZN:
ACT originated on 11/11/98.
Closes above IL 1/5 thru 1/20. You woulda hated this one. IL value on 2nd day over
IL on 1/6...122 5/16 with price at 137 7/8.
Returned to ACT 2/17. Value of ACT that day was 92 1/2. 199 1/8 to 92 1/2 is 53.5%. >
First, I don't understand why you use $199 1/8 to compare $92 1/2. $199 1/8 is not your IL value, and was not a value that you can achieve by your model at the time, you only knew it after it happened. Maybe you better short it at $199 1/8 instead of your IL value $124 1/2, but again when it reached $199 1/8, you had no way to know that it would be the high, you could only know it after several weeks.
Then, after AMZN cross IL on 1/5 at $124 1/2, it went up as high as $199 1/8 within 3 days. Then you got the low $92 1/2 six weeks later.
So when it violated IL, if I shorted, I would have $74 5/8 upside risk while have a potential reward of $32. Why I should take this risk-reward ratio? If when a stock violate IL, it still has significant upside potential vs smaller downside risk, what is the use of this system?
And if you tell QCOM shareholders that their stock may go to $226 before back down to $120, it certainly would not make them any nervous, but only to bring out a lot of more buyers. |
