Folks it's time to change our thinking caps. It's time to stop chasing 52 week break outs and to start catching falling knives. This is dangerous sport folks buying ugly is never easy it takes a firm knoledge of events which thankfully we have in spades here at SI. My first thought today is about the incredibly down stk CHDX.... a look at the yahoo board will see many a poor youngin jumping ship as this Chinese medical play put in an unusual 8 straight down sessions. Now they have ensured another by registering a $100 mln convert.... At around $20 you can see on a chart you have good support... the risk of lower lows is always there but once they get some announcements out of the Chinese Gov after all this Earthquake mess-- they are going to need this companies products more than ever! BWS is out today with a call I have no idea whop they are- CHDX: Would consider weakness as a buying opportunity@BWS Financial BWS would use any weakness from the $100M shelf as a buying opportunity as they think the company is putting the news out ahead of Chinese regulatory approval of the S-model Da Vinci surgical system. Shares remain Buy rated. This takes balls folks I'm not sure I got em... this stk is acting like there is some terrible news out there.... yet my risk o meter is telling me to take a chance here.... ~ stoney
www.elitetrader.com/vb/showthread.php?s=&threadid=80355&highlight=falling+knives make no assumptions and watch price action. you'll begin seeing the same patterns over and over. 90% of the people at ET are failing. I bet 90% don't trade falling knives.
Victor when you have some prior support and you feel a stk is oversold you have to make a little assumption. If everyone sat on their hands and waited for follow through days we would never go anywhere. Where in the world did you get that stat? Barron has published twice the real numbers 55% break even 40% Lose money and 5% do very well. You are 5% light! Anyway the fact that such a huge subsection does not partake in falling knife theory FKT certainly would not warn one away would it?.........
CHDX is a winner of a trade for today. Unfortunately I got weak hearted and sold my position off a couple hours after I bought it for +$4.00 profit. Four bucks. That won't even buy you a cwoffee in New York. If you really bought it at $21.00 as you said you're up almost $400. That'll buy you a lot more, even in the big city. Good work. How much upside potential do you see here? I might dip my toes back in later.
Yup I just posted on it to tell the truth I got an institutional tip that earnings will be good. I'd rather focus on the fact that I bought in at $10 and it's a great chart I think going to $17 I got like 400n shares in a partial fill so I've been looking for a chance to add and wouldn't you know it a day before earnings it pulls in a little....
Falling knife can be lethal for beginners or wishful thinkers. I make most money on reversals, going against the herd. Here is an example of correct "FK" trading ( vertical green bars are buy signals) for CSUN. As for CHDX right now - it is just plain sick and you are going to suffer with it ( don't confuse CHDX today with March's case ) JMHO DavidDT http://www.trading-to-win.blogspot.com/ "Wall Street never changes, the pocket change, the suckers change, but Wall Street never changes, because human nature never changes" Jesse Livermore