You were right and I was wrong. But by the time I considered reacting, the stock had droped too much. Anyway, I spent a lot of time thinking why it had droped and where the absolute bottom should be and how high it can go. To make it short, I concluded that barring any tiny down spikes, the low had already been seen yesterday. I figured a lot of weak hands will have to sell at the open, and a number of trend followers would keep on shorting, but will get squeezed out. So today I bought a ton ~26 and waited. When it hit 32, which was my resistance level, I considered selling out, but decided to see if my analysis was right. As hard as it was, I did not sell when the stock fell to 29 from 33, waiting to see how the last minute action would unfold. And you know what? There was a lot of short covering rear the end, but not enough (IMO). I think we are headed towards low 40s (may be even mid 40s) before stabilizing around mid to high 30s. Anyway, this is how I am going to play this out, unless the market tells me otherwise. Today we had a down spike after more than 50% drop in less than a week, so the rebound to the levels I mentioned should be very possible, especially if the shorts oblige <g>
BTW, I read this on the laughter thread:
Q. What's the difference between a whore and a market maker?
A. The whore doesn't change the price when you tell her about the size.
Sun Tzu |
