MKC,
Remember first and foremost that emotion is never ever to be a part of your investing decisions whether short or long.
If INCY is to be a great company and do well in the market, it will show on the PnF chart. If you like the company and think it will do well in the future, great but wait until the stock is ready to buy. Why try and guess what a good price is. That is what most do. They think the stock is a sale at 25, cheap at 17, a steal at 10 and a back the truck up special at 5. When at the same time the PnF chart would tell you (most likely) it is a falling knife that shouldn't be caught. You could ride that stock down 10, 15 or more points thinking you are getting a good deal. Why? That doesn't make sense even if you are planning to hold for 5 years. What if you buy at 25 it falls to 10 and 5 years later you are holding a stock that doesn't move past 15?
I say take the emotion out because it sounds like you are anxious to own this stock. Technically, it doesn't look good. It has broken trend, the RS is in O's, the market is not in a good position, the sector is negative and it has given sell signals.
What would be best under these conditions is wait for the stock to make a solid base and some buy signals. That way you know demand is coming in and you are holding on to something solid.
PnF works for all types of trading. It keeps in mind your best interest. You really don't know what this stock is going to do in the future. Right now the fundamentals look good but what if you jump in now, the stock drops 10 and the fundamentals change? Let the technicals answer one half the investment equation for you.
Keep watching the stock. If it firms up technically and the FA still looks good. Go for it. Until then, sit on your hands :-) |
