Tuna,
I think you guys need a voice of dissention--maybe someone to flame--here I am.
CURE? This unalloyed hype is even a bit much coming from you. Just how does MUSE CURE EDS? Think you'd better look up the definition of cure, Doc, because MUSE doesn't cure EDS any more than insulin shots cure diabetes.
100% CERTAIN that MUSE will be >32 next quarter? Money back guarantee on that? Nice to know that you are so omnipotent that you can predict future stock prices with certainty. Stretching it a bit even for VVUS's #1 hype artist.
Getting a little paranoid, Doc? Seeing Mafia (goodfellows) under your bed? Shorts are Mafia? Conspiracies among MM or national brokerages to drive VVUS down? Sounds like you're losing it, Doc, just because VVUS is down for 2 days after you bought it at its bottom? Mark Stang's post is possibly accurate for Friday--then up Monday. (Just dont get too euphoric, any rise will probably be short-lived.)
AVERAGE DOWN? There are many truisms in successful investing, and one of the foremost is DO NOT AVERAGE DOWN. If a stock doesn't move the way you expect, admit you made a mistake and get out of a bad trade instead of placing the whole world in a conspiracy to make your stock drop. You may be "lucky" in a bull market to average down and have the market bail you out, but in a downtrending market (which we may be in the initial phase of) averaging down is one of the quickest ways to ruin. Even if you do this, you shouldn't be advising others to engage in your folly.
A little TA (that's Technical Analysis, not Tuna A.), would have alerted you to wait--that VVUS was in all probability going down when you bought it. It is now so short-term oversold that it should go up tomorrow or Monday, but the intermediate and long term (2 month) oscillators are still pointing down, so any rally from here should be short lived--a week or so, and probably wont exceed 28 1/2. Another indicator, the CCI or Commodity Channel Index, is at a -234 (last time it was this low was June 21), but hasn't turned up yet--indicates very oversold and any close above -150 is a buy signal.
There is a $2750.00 software called Advanced GET which features Elliot Wave analysis, complete Gann line capability, calculated Fibonacci regression/extension, linear regression, and dozens more common TA indicators as well as several proprietary ones that you dont know how they are calculated. Had planned to give you a Elliot wave analysis (horrors!) but now when I bring the chart up, there are no Elliot waves. Tuesday, VVUS was in wave 5 (the last one of an up cycle) and turning down to repeat the 5 wave cycle only down this time. Wednesday, the drop caused GET to renumber , calling this near the end of a wave 4 retracement, with a 5th wave breakout expected to take it to between 35 5/8 and 41 7/8. Today, it totally renumbered the wave count, calling this wave C of ABC (down-up-down). This is the 4th ABC movement in the past year+, no discernable Elliot waves--only random or unpredictable moves as far as Elliot waves are concerned. GET's advice --find another stock out of 9000 that is amenable to EW analysis<ggg>. Without EW, that leaves trend lines, moving averages, and overbought/oversold oscillators to try to discern which way VVUS will zig or zag next.
Gann lines/angles? VVUS held at major Gann support today, and should rebound until it hits a Gann resistance line which is at~28 1/2. This is a declining line, so the longer it takes VVUs to get there, the lower the resistance line is.
Linear regression channel (fancy, but accurate trend lines).VVUS penetrated lower channel limit today, but closed above it. The upper channel is also at 28 1/2--which, if penetrated to the upside could mean a significant change in trend--to up. Gann and linear regression are calculated totally differently, so their agreement reinforces the other.
Optimized Parabolic SAR (support and resistance). A mouthful, but I think GET is the only software to optimize for each individual stock--whereas others like Windows on Wallstreet make one formula fit all stocks. This also is often very accurate, and it places resistance at 30 3/4 today--that is VVUS would have to break 30.75 before a change in direction would be sustainable or dependable.
One last retort--you might consider "panic" if VVUS breaks its 200DMA at 22.5 because it will cause a lot of selling by mutual fund money mgrs. and even your favorite retail broker will be on the phone advising to sell. Gotta know what the herd may do and get out of its way!
Regards,
Gary |
