|
| Upcoming Events |
Stockscores.com Stock Trading Clubs
The Stockscores.com Stock Trading clubs are a great way to learn better investing and trading skills, and meet other market players. Membership is a mere $10 per month.
Vancouver Meeting
Thursday, October 30 6:30 pm
Best Western Abercorn
9260 Bridgeport Rd, Richmond
Register
This month, our agenda will include:
Market Overview
Search for Opportunities
Option Basics
Playing the Pullbacks
Trade Decision Logic
Hope to see lots of you there!
|
|
Stockscores.com Perspectives
For the week ending October 17, 2003
In this week's issue:
The term technical analysis gives a clue to its nature; it can be a pretty technical way to analyze the stock market. With only the open, high, low, close and volume data to work with, some technical analysts give the stock market's trading data a mathematical massage that leaves many observers numb with confusion. However, more sophistication in the analysis of the market does not necessarily correlate with better returns. In fact, I submit that it does quite the opposite.
I have watched many people go through an evolution in their analytical approach which diverges from Darwinian principles toward strengthening the species. They begin with a simple approach that makes some sense, and probably make some profits in the beginning. As time passes, the inevitable losses that arise from stock market trading lead the trader to focus on more and more sophisticated analytical techniques. Soon, there are so many lines, indicators and numbers on their stock charts that they look more like a basket weaving project gone terribly wrong.
This basket will hold no water.
While many market analysts seek the holy grail of indicators that will predict with unwaveringly high probability the future direction of stocks, they get lost in their analysis. And in doing so, they miss the point.
Stock trading is not about having the best system, nor is it about being the smartest mathematician. The successful trading of stocks is about recognizing that trading is a simple probability game that requires, above all else, the mastery of self.
Do you find yourself applying many different techincal indicators to a chart, and always looking for more? Are you a fundamental analyst who believes your success is dependant on spending more time delving in to the intimate details of a company? There is a simple cure for your disease.
Keep it simple, ah, stupid.
With the utmost respect for my readers, I want to drive home the very important point that your success in the stock market will have more to do with your ability to master your emotions, maintain your discipline and keep it simple. Minimize losses, let profits run, avoid gambler tendencies and use simple analysis to identify opportunities. Focus on what motivates people to buy stocks at higher prices, or sell stocks at lower prices. Stay one step ahead of the crowd, and your success will be certain.Back To Top
The reality of the stock market is that stocks do not always go up. An ability to take advantage of stocks going down can dramatically improve your long term performance in the stock market. By short selling stocks, we can make money from a company's misfortune as we sell stock that is borrowed from our brokerage, with the expectation that we will buy it back some time in the future. The aim of the short seller, of course, is to buy the stock back cheaper and return the borrowed shares to the brokerage with the nice profit that materialized as the stock sunk lower.
The Long Term Breakdowns Market Scan on Stockscores.com seeks out stocks that are breaking through support levels from pessimistic chart patterns. It identifies stocks that may have a high probability of going lower in the weeks and months ahead.
I ran this scan on Friday and it identified 23 candidates. I then inspected the charts of each stock, and found three stocks that appear likely to move lower, making them good short selling candidates.Back To Top
1. AMGN
AMGN appears to be reversing a long term up trend. The stock broke down through the $65 support level on Friday, trading on strong volume. It closed near its low of the day, and appears to be meeting a growing sense of pessimism among investors, as evidenced by the falling tops on the stock chart. Notice the sharp decline in the Signal and Sentiment Stockscores.
Back To Top
2. BLI
BLI has show good support at the $15 level for a number of months, but Friday saw that level violated. Since the stock has been suffering quite a bit over the past month, I would not be surprised to see it show some strength in the short term, but over the longer term, it looks like this stock is destined to go lower too. The Stockscores indicators are jumping lower too.
Back To Top
3. PCTI
Over the last two and half months, PCTI has repeatedly bounced off of the $10.25 - $10.50 price level, and been able to hold. However, Friday that psychological barrier broke down as a faily active trading session took the stock down to $10.05. The falling tops on the stock chart also demonstrate a growing sense of pessimism among investors, which is why the Sentiment Stockscore has moved below 60. The Signal Stockscore has spiked lower because of the abnormal move to the downside through an important support level.
Back To Top
References
Get the Stockscore on any of over 20,000 North American stocks.
Background on the theories used by Stockscores.
Strategies that can help you find new opportunities.
Scan the market using extensive filter criteria.
Build a portfolio of stocks and view a slide show of their charts.
See which sectors are leading the market, and their components.
Disclaimer
This is not an investment advisory, and should not be used to make
investment decisions. Information in Stockscores Perspectives is often
opinionated and should be considered for information purposes only. No
stock exchange anywhere has approved or disapproved of the information
contained herein. There is no express or implied solicitation to buy or
sell securities. The writers and editors of Perspectives may have positions
in the stocks discussed above and may trade in the stocks mentioned. Don't
consider buying or selling any stock without conducting your own due diligence.
Back To Top
|
If you wish to unsubscribe from the Stockscores.com Weekly Perspectives or change the format of email you are receiving please visit here. Copyright 2003 Market Perspectives Inc.
|
