Mike,
First I would like to say that I am very happy for all of you NOVL investors. I am a shrot term trader & I never underestimate the power of TA. It helps me enter & exit stocks, so I am not just depending on my gut feeling.
Well the volume was high, so I stuck around till end of day where I saw weakness in the stock & I wanted to protect my profits. We are all in this for the money, right!.
Here is the story, On Dec 31 I bought 5K of NOVL at 9 1/2. The stock took off last week & it tried to break resistance of 11 but it could not. I sold at 10 7/8 & was looking for another entry point. The stock went down to 10 1/2 then last tuesday morning, I saw large blocks going at the ask of 11 1/8. I did not hesitate & I got back in 5K@ 11 1/8. The reason I bailed out today was due to :
- No news at the ~ 3:00
- No change on fundementals
- ~ 75 RSI ( reletive strength indicator) indicating over bought
- Sharply rising upper bollinger band.
- A gap is created from 11 to 12 5/8
- I will sleep better this weekend
Here is my take now for monday.
- If high volume continues, I am back in for the ride. At least I will catch it going up, and not have to sweat it going downward
- The stock must close above upper bollinger band on mondey @ 12.05. If it falls below that, then it is heading to support of 11 from the weekly chart. Eventually, with sharply rising upper band, the stock will fall to the 11 range. A recent example of this was my take on DIGI. Of cource, this will not happen over night, but gradually. How many times did you see NOVL shoot to 11/11.5/12 but only to go back down where it was?. That was examples of NOVL getting ahead of itself with a price shoot over the upper band. Only to settle back to support.
However, News of new CEO will overcome TA. Take over, well then it is over.
- continued high volume will help delay the pullback.
- Next resistance level from the monthly chart is at 16 and falling
Although I am saying the stock will pullback, but only to build up momentum, clear out weak holders, & when the chart satbilizes, I think we will try to break the 12 1/2 & 16 levels.
If the stock doesn't pullback & continues higher ( Hopefully & if GOD is willing) I will ride it with all of you to 16
I know I am taking a chance here if news come out with me out of the stock, but I have been in & out of NOVL 5 times the last 2 month & been very sucessful with it, thanks to the LORD, and to TA.
Please remeber that I am doing my homework, now I know what is going on & what to do. I could be wrong, so please do your homework.
Good luck to all of you
Nadim |
