TA update for those interested ...
Please refer to previous updates at: http:http://www.siliconinvestor.com/subject.aspx?subjectid=18417.
Nothing has really changed with ICOM's technicals since the last update, except that: 1) it closed below its support at 4.25. This is a bearish indication. The next support is around 2.13. As I stated in my post yesterday, I looked for the bottom today, got back in at 3 1/4 and exited for a point at 4 1/4. I'm strictly in daytrading mode with the stock market at this time and will continue trading this way until we see some floors being built that we can grow on.
Starting with Worden's indicators, see the new TC2000 chart at jimbeamii.com 1) the BOP closed more negative than yesterday, a sure sign of continued, strong, systematic selling; 2) TSV stayed negative and continues turning down; and 3) Moneystream continued to fall lower with the price. Given these very clear indicators, an investor would not want to touch this stock because it can continue its down slide, dramatically. On the other hand, if you have time and tools that will allow you to track and trade quickly, ICOM presents a lot of trading opportunity.
Stochastics are oversold and continue to trend down. tscn.com. The TC2000 chart, above, shows stochastics trying to cross over, which would give a buying signals at these oversold levels, however, IMO, that won't happen until the selling as subsided.
MACD continues to trend down in a sharp negative angle. tscn.com. MACD will not start turning up until it senses that the systematic selling is coming to an end.
RSI continues down and is well below 30, indicating oversold, but it has not began trending up, confirming that momentum is not on ICOM's side. tscn.com.
Support at 4.25 (2/3/00) was broken today; The next support is 2.13 . Long Term support is around 1.20. (See TC2000 chart, above).
Given the above, selling will probably continue. I do not think the price will decline to current support (2.13), but I can see a close below $4. This is not a prediction; it is a caution in the event you are margined.
I would like to address several comments that have been made in the past couple of days regarding my read of the charts and TA, in general. TA is a very powerful tool that provides very specific indicators for getting in and out of a stock. TA right now says you should not touch ICOM with a ten foot pole. And, yet, we are still trading it. Why?
First, I originally entered ICOM as a swing trade because the technicals were very good. However, although I averaged down substantially from my original entry at around 7 13/16, the technicals said to get out as an intermediate investment, which I did for a 15% loss. All of these trades are well documented on the Yahoo board.
Nonetheless, having covered ICOM for several weeks now, I am familiar with its trading patterns, its price fluctuations, etc. So, for the short term, it is a good trading stock. I have more than re-couped my original swing-trade loss. I've traded this stock many times, up and down, over the past few weeks, including shorting it from 6 to 4 1/4, then buying back at 4 1/4 and selling several times up to 5 3/4 on 3/31; shorting at 4 1/2 to 3 1/4, then buying back at 3 1/4 and selling at 4 1/4, today. I have documented all non-short trades. I did not document the shorts because, for some reason, people view shorting as something other than "just another trade".
So, all that is to say, in terms of TA, is that TA IMO is strong medicine. It tells when to get in or out a stock, and provides good indications of what to do in the interim.
I never fall in love with a stock. Stocks are like every company I've ever worked for. The company will do what's good for the company; it does not care about its employees. Do companies think more about investors than its employees? You make the call.
Now, why I am here trading a $4 stock? Because one of these days I will write "in at x x/x" and wait for an exit ... but that exit won't be taken. There will be news, and the stock will begin its way back to the top that I know is there, based on my original research of the stock.
I'm writing all this because I get tired of hearing all these people slamming what others contribute, in the context of TA. TA is a wonderful tool. But it is meaningless if the reader does not understand what it is supposed to provide. It provides a lot to me. I profit from it daily.
Right now, all the TA says is don't buy ICOM. Does that mean it's not a good trading stock? Absolutely not. You trade on your balls, and your good sense of the current market.
The above is based strictly on what I may or may not know about Zen and the art of reading tea leaves.
Good Trading!
jbii |
