j1, fwiw, I still stand by my cautionary post #32669 regarding techs that have risen 50-100% in the last few weeks even though I still own positions in just about all of them...if anybody followed me out the exit door on FNSR at 39, I apologize and can only hope they also followed me in through the entrance at 24 less than one month ago...(same with JNIC at 40-42, NTRO at 45-46, WFII at 47, LPTH at 26-29, IBM at 103, etc., etc.).
After foolishly giving back some HUGE gains during March and April (and I'm probably not the only one here who did that), I wanted to spare myself (and others, hopefully) of a potential repeat performance by taking "partial" profits.
This was certainly not a wholesale recommendation to liquidate everything and go to cash (except for my mistake in exiting FNSR completely, which I did correct and post at a cost of 1 full point).
As for stochastics:
Simply put, stochastics are an automated charting tool (similar to moving averages or Bollinger Bands) with parameters that can usually be adjusted to respond quickly or slowly to changes in a stock's technical behavior. They, along with other indicators, help me to judge whether a stock is overbought, oversold, or somewhere in between. I tend to prefer slow-moving stochastics (like a 50-day moving average as opposed to a 10-day moving average) because they "filter" out intraday trading "noise" and help prevent over-trading and whipsawing.
The trade-off is that I rarely catch precise bottoms or tops (as you well know!).
My overall goal is and always has been to capture the biggest, fattest, easiest, and safest part of a stock's short-to-medium term move with the least number of trades, grey hairs, and hours of lost sleep...and to be able to do it anywhere in the world using only my trusty PowerBook and crusty noggin.
Options trading probably requires a lot more precision, especially if the contract expires soon.
Again, j1, I'm very sorry your windfall became "chump change." I'd e-mail you a cold beer if I could!
Regards,
Mark Konrad |
