Hi Ron,
I almost missed your question since I no longer sign on by
full name as I originally did several years ago. I do look
at the subject bookmarks to see what others are posting.
NITE
"How can I tell for sure the stock getting ready to reverse?"
Make sure you get the free newsletter at
coveredcalls.com this month. I'm covering WINs
breakout Indicators.
This may seem like a long answer. It is not! I'm comfortable
with my logic since it has worked for me. And, I continue
to get better at it all the time. I find the technical
charts do a fantastic job of giving solid clues to bottoms
and for tops reversal points. Now, that does not mean to
the penny and the exact hour of the day for our purpose on
this forum. You would have to be glued to the computer
screen to do pinpoint that point live. It is possible.
Here is a chart profile in weekly profile mode. As I write
this, I see a stock that made a recent high and is making
a second attempt. The first attempt petered out around $65.
Do you see that????
iqc.com
Now, I know from observations that the first attempt to
match a 52-week high is practically impossible. Human greed
and all the folks cashing out will bare me out on that fact.
The charts patterns demonstrate that over and over.
Now, in the NITE stock I see a crowd starting at $50 to $65
that are just waiting to determine if NITE will hit a new
high. Do you see that horizontal resistance line starting
at $50?
Notice, the classic upper and lower divergence (moving in
opposite directions) in the BBs? The moving average in
between the BBs is slanted upward, low RSI for this stock,
OBV turning positive. This stock is in a coiled position
and ready to breakout. I would venture to say to the upside.
Why? Lots of confirming technical data points that way as
the OVERALL trend!
Now, switch the chart profile to a daily setting and you
will see:
iqc.com
A different picture, yes? Well, this one gives more data
to base the here and now planning. I could just trade the
stock straight or use the CCs as my insurance and leverage.
I see that the overhead resistance has begun. Why? The RSI
which is high at this point has begun to level off and
perhaps may pull back more. Those folks at the $45 dollar
range have decided to fold and sell the stock to get out.
All weak hands must finish before the stock can move ahead.
End of the year tax lost selling may have some influence.
When is the next earnings release date?
June of 1999 was there entry date for many. This is the
first opportunity to unload. The majority did not CC all
that time. Thus, they have made peanuts in profit. Unlike,
our folks that would have some change in their accounts.
The trading volume is dropping.
The answer to your question is NITE may very well move
sideways for a while unless some new press release triggers
a stampede. Add the fundamentals to the picture???
NASDAQ: (NITE : $43 5/8) $4,867 million Market Cap at
November 17, 1999 Trades at a 94% Premium PE Multiple of
34.6 X, vs. the 17.9 X average multiple at which the
Brokerage SubIndustry is priced.
I find it hard to believe NITE would make a new high soon!
With a 28.6% growth rate and a P/E of 34.6 I would say take
your money off the table and RUN!
There are plenty of other puppies out there to CC and milk! |
