Very long post, Part 3 of 3, RE: NSCP
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Since this is becoming a really long post, I'll try to complete my answer to Walter w/ this post. I apologize if this becomes as a "nonsense" to other people who are not interested in NSCP. But, IMO this can be applied to any rolling stocks. So, please bear with me little longer. One more thing I forget to mention previously that NSCP's chart also can be viewed at
investools.com with lot of details than
http://www. stockmaster.com.
Here we go again....
7. There are couple things I always do. This is a fast moving stock. So, I have to monitor it every day when the market is open. Every day, when I'm in, I'll check the stock movement for some time and it will tell me which direction the stock is moving. If you cannot do this, I advise you to stay away from this stock.
8. As like any other stocks, this moves w/ positive and negative news/development. I think the current uptrend is due to NSCP's strategy day announcements on 10/15/96. NSCP is trying to put lot of pressure on MSFT. NSCP had several news releases and announcements on this (you can find them in many web sites including yahoo and NSCP's web site). Basically, it is about intranet and Navigator 4.0. It has been claimed that by using Netscape communicator that all net based applications can be run in a single plateform. There is also a claim for cross plateform compatibility, where you can use microsoft's programs (like Win 95) on Navigator 4.0. For more technical info, just go to NSCP's website or listen to
news.com
(Note: you need RealAudio for this and the conference is about 50 minutes). NSCP also claim that they are going after intranet where they can make lot of money. They down play the browser war b/w NSCP and MSFT saying that it is a very small market compared to intranet.
9. So, these are the driving forces now. It is remains to be seen whether the market will buy this or not.
10. But, in the mean time I think we can consider NSCP as a rolling stock and benefit from its volatility. At this time, I don't know whether NSCP will become as a long term play.
11. The main problems I have w/ NSCP now.
(a). Its huge short position - But, consider this. This is what makes it as a rolling stock. People short when it go to certain higher levels and cover when it falls to lower levels. So, this is perfect for us.
(b). Earning report due next week - I have no clue what will happen next week. But, hopefully I can sell at least part of my holdings by Friday and make some profit.
(c). Competition (sp) from MSFT. In the past, MSFT was known to have driven several competitors (almost) out of business.
With these things in mind, I think NSCP makes a good rolling stock.
Walter, to specially answer your questions:
You asked:
>>1. You apparently try to play the weekly cycles as you said you've played it several times this year. How do
you pick the top and the bottoms for the sell / buys, especially when they are superimposed on the 4-5 month
cycles which cause very steep slopes at times.<<
My answer:
As I said in my previous post, I don't try to pick the top or the bottom. I play the spread in between. It has been quite profitable.
You asked:
>>2. Do you wait until there is a clear signal that the stock has changed direction? If so, how do you detect that
change ?<<
My answer:
I'll look for the bottom or top depending on whether to buy or sell. And I buy/sell whenever, it changes the cycle trend.
>>3. Do you take into consideration the high and low daily trading ranges, or do you just work with the closing
prices ? How exactly do you set your buy and sell limits ?<<
I used to do some thing like this. But, many times it becomes confusing, especially w/ NSCP. I use (Today's close-Previous day's close)*Volume as an indication of the trend. But, more than that I buy on a gut feeling. I use my margin account for this since I'm not going to keep this for long time. Usually I'll buy 1/2 of my position at first and in couple of days, if it is an uptrend, I'll buy more. (Ex. I bought NSCP at 39 3/4 last week and 42 3/8 this week). But, if I proved to be wrong, I'll sell my initial position immeadiately or hold on to it if I bought it in low ranges (35-42).
>> 4. Do you take any note of the 4-5 month cycles ? If you've played this several times already this year, it
wasn't clear there even WAS a 4-5 month cycle until maybe Sept when the 2nd cycle completed. Hindsight is
alway 20-20, and you apparently did it with foresight.<<
No. I used this only to see the overal trend of the stock.
>> 5. Do you use any technical analysis to assist in picking tops and bottoms ? In this case, the stock has had little
trading history, and the only support/resistance levels I can see would be about 80, 50 and 35. I wouldn't
consider the weekly oscillations to establish effective support/resistance levels.<<
Please refer my previous post. I use technical analysis some time, but only after I looked at the fundamentals. I like to beleive that I can make lot of money thru TA and so far it did not happen to me. Any body, please tell me I'm wrong....
That's all folks. If any body have any comments on this (positive or negative), please post. I'll appreciate that.
I also urge others to posts the methods they use in picking/selling the stocks. This forum does not need to be only for rolling stocks. If possible, you guys out there can point us to some good threads.
Take care and happy trading,
--Salim |
