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Strategies & Market Trends : Ask Vendit Off-Topic Questions -- Ignore unavailable to you. Want to Upgrade?

To: DOUG H who wrote (5764)	3/3/2005 4:12:53 AM
From: Walkingshadow	Respond to of 8752

We posted about AMD a couple of weeks ago, and as expected, it was a successful short: Message 21034281 Message 21036362 Now AMD has set up again for an instant replay. If anything, this setup is even better than the last. IMHO, this is a very high probability short, with low downside risk. It is also an excellent example of how these kinds of stocks can be shorted again and again and again for a year or more.... lie in wait at the downsloping moving averages, look for a reversal candle at that resistance, then when the stock fails at the intraday moving averages and trades below the low of the prior day, that is the entry signal. AMD is dead money for at least a year, and probably several years. The only profit opportunities in this stock that make sense from a risk standpoint now are short positions. Long positions are a sucker's game because the volatilities are working against you, and increase your risk to an unacceptable degree IMHO. You can see a very dramatic example of this with KKD----the upshot of the volatility problem is that rallies are short-lived and end rather suddenly and violently, whereas downtrends are more orderly and sustained, both of which arise from the fact that the stock is in a long-term downtrend: 139.142.147.218 Message 21093522 In other words, the problem with AMD is exactly the opposite of AAPL: with AAPL, most of the volatility is to the upside, but with AMD, most of the volatility is to the downside. If you align your trades with these volatility mismatches, you favorably alter the risk profile of the trade. T