Hi Mike, thanks for the reply. Here's further ideas.
To enter a stock on fundamentals, there should at least be some indicator of upward movement. The most basic one is the crossing of the 20 and 50 day moving averages. The 20-day MA crossed over the 50 last July 31, and has been below it ever since. This is the most fundamental indicator of a stock in decline (regardless of underlying worth of the company). To enter on fundamentals, one should wait until the 20 crosses back over, to verify an uptrend. You miss a little of the total gain, but you miss all of the ugly downride.
It's interesting, I just looked real close at the DWCH chart using Stochastics, and I counted seven clearly-indicated opportunities to make a point or so on DWCH, since last July. It seems to me the only way to make money in a stock in general decline is through TA. Stochastics shows an upward trend today, just like those other seven. If it (+D) peaks and starts falling again before the stock makes sizable gains, the downtrend will most likely continue. The very short term trend is up right now.
I got in at 5 1/8, and again at 4 5/16. My biggest beef is really against myself, since I didn't do my due diligence (I've also learned a great deal since then). My gripe with "professional" brokers is that they would even recommend a stock in general decline. A market maker's job is to promote a stock through good and bad. (That, plus Lieberbaum's executed my second order at 4 1/2, above the real-time ask of 4 5/16.)
I'm getting out of DWCH at the next downturn, just to be back in cash. When it starts a clear upturn, I'd start recomending it on fundamentals.
Robert |
