To: uclatrader who wrote (2148 ) 7/9/1999 4:02:00 PM From: Sir Francis Drake Respond to
shuo - no, I'm not a NITE bear at all. In fact, my being bullish on NITE is what got me into trouble in the first place. I looked at NITE very carefully - did all the FA I could lay my hands on, and I really liked it - correction I *STILL* like NITE on fundamental grounds (the only possible negative I see is the ECN issue). Well, I then looked at the TA - and it was TERRIBLE. I just couldn't reconcile this great FA with this terrible TA. I wrote many posts expressing my puzzlement about this discrepancy - how can a stock that has seemingly everything going for it, great fundamentals, great quarter ahead, institutional/analyst support etc., etc., etc., behave so badly - hardly budge even in very positive markets, constantly under selling pressure, huge selling blocks going off into every flicker of strength, seemingly impervious to good news (its own PR, online brokers doing well, etc.). The trading pattern and TA was telling me something is very wrong - but I got seduced by the great FA. Usually, when my TA and FA don't square, I don't play the stock - there are too many issues out there where TA and FA work great together, no sense in taking a risk with one where that is not the case. But, I disregarded my own rules, and bought into NITE, based on the great fundamentals, and I ignored the TA. Well, the chickens have come home to roost. This is a good lesson, and I'll try never to do such a thing again. As a trader if your TA and FA dovetail - great. But otherwise, if there is conflict, it is better to ignore the FA, and trust the TA. The charts don't lie, short term - longer term you just don't know, the FA may change! That's why traders call it not fundamentals, but "funny-mentals". Since I bought in early enough, I didn't lose anything, but I certainly tied up capital stupidly in a hot market. Lesson learned.
