Peter:
I usually try to look ahead couple of days when I do TA. What Jay
posted was yesterday's snapshot, even in his post, he mentioned several factors
turning neutral from negative. I try to look at the current trend and make a
guess how the future trend will look; if the TA is showing indicators going
from negative to neutral, there is a fairly good chance it will turn for the
positive. Other additional factors also contributed to my decision to long CUBE:
1. CUBE at it's 52 week low, when a stock hits new low, it tends to bounce
strongly back.
2. I believe alot of the selling is tax loss related, and today is the last
day of tax loss selling, with very probable broad based rally due in
couple of days, when Janurary comes around.
3. CUBE is still the leader in DVD, it's the next piece of HOT/Fashionable
consumer electronics, I am expecting stronger DVD sells for Christmas.
4. Today's action shows a strong uptrend, how it stopped dropping @16 and
made an impressive come back to finish up 1/2, I think the bounce is
starting.
5. Assuming alot of people shorted CUBE the past week, I think they will start
to cover in the coming days to lock in profits either for this year or
next year.
6. I held CUBE before in May, they bounced back from 16ish level also, seems
like 16 is support for CUBE.
Of course, I could be wrong on CUBE, and it may very well fall again
tomorrow, but I will hold at least till next week, after the fund managers
starts buying back all the beaten down tech shares. There are always risks
involved in the market, but longing CUBE at this price point, the reward far
outweighs the risk.
Regards |
