Thread, You all should stop thinking about buying a stock because it has come down from some lofty price, you are thinking backward if you do. At this point you should be looking for how large the vol. will need to be on the downside, and how low will it need to go, before we see a wash out. At some point we will see what I'm talking about above for the market at large. Try not to buy the first bounce off of this wash out, normally the first recovery is false. The reason for this false recovery is the fact that many investors will use it who are in pain, to get out at what they feel to be a better price. Renewed selling will occur, resulting hopefully in a double bottom. Sometimes this renewed selling will take the market even lower, showing to you what you thought was the bottom was in fact just a rest stop before the market resumed going lower. But if we are lucky, the second recovery will in fact be the bottom. I would like to see a catalyst of some type on the inflation front, lower gas prices, lower bond prices, or slowing economy to coincide with a bottom.
As far DELL is concern, I feel the low 30s would be a nature buy point for a nice trade to 40. 55 will not happen anytime soon unless something changes with the current DELL story.
I like to look for stocks that have held up during the sell off and which ones recover fastest off of a bottom, those are the ones that normally produce nice gains going forward.
Greg |
