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Candlestick Help with STEM

 
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waverider



Joined: 18 Sep 2004
Posts: 2
Location: Huntington Beach, CA

PostPosted: Fri Jan 07, 2005 12:08 am    Post subject: Candlestick Help with STEM Reply with quote

I need some help reading the candlesticks. I bought STEM on 12/23/2004. Based on the "kicker" noted in Steve's closing e-mail on 12/23. Is todays signal indicating a major reversal (shooting star) or is the "kicker" om 1/4/04 in effect? How do I read this?
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tab321
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PostPosted: Fri Jan 07, 2005 2:05 am    Post subject: STEM Reply Reply with quote

WaveRider:

This is my stricly unprofessional opinion. If I am wrong....you can shame me from the high heavens. That way..both of us will learn something. But here is my take if you want some things to consider.

STEM is 71% above the 50 Day MA and it will not stay that extended forever. Price will come down or the MA will have to catch up.

STEM had some big volume buying three or so days ago and those guys will be back but they will let the price settle down - more than likely - before plunging in heavy again.

On the other hand, it is at something like two year highs and has broken out of a lot of resistance. It could run forever upward. A stock that goes from five dollars to one hundred dollars - does it by going to 10 then to 20 then to 30, etc.

However, even if it goes from 5 to 100....there will be a lot of ups and downs along the way. Since you have a great profit, why not protect some of it by taking an exit if the price falls below the middle of the big white candle of Jan 4th which would be about 5.26. I would figure it will test that area. If it falls below that area - get out - and look for a new signal and entry if you want to ride it up.

Jan 4 is a kicker - looks like to me. Kickers are great signals but many of them are tested pretty hard if the market turns sour.

In regard to your question, "How do I read this?" - I would read it as a Kicker on Jan 4 - be thankful you got in on the ride - protect your profits if the Kicker fails.

I would hesitate to call today's action a "Shooting Star" until it is confirmed. As for the Stochastics, they are up there above 80 but they can stay there a Looooooong Time if a stock continues to move up.

Big Selling on the 5th. If those guys get convinced the stock is not moving higher pretty soon....they will take their profits out and that will add to the testing of the kicker signal.

If you want a mechanical stop loss - set your exit a 3*Average True Range which is about 4.21 or 27% below the close on Jan 6th.

Stop Losses and Protecting Profits is tricky business. It is something all of us need to learn. Good Luck - let us know how you play it out. I wish I could tell you "the" answer. If I knew that....I would not be on this board learning anything from you guys.....I would be on my Yacht drinking Soda Water and talking about the hard times of days gone by.

If it were my holding, I would stay in until it breached the 5.26 area. That is my call. Hope that helps.

TBeard
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tab321
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PostPosted: Fri Jan 07, 2005 2:09 am    Post subject: One More Thought Reply with quote

WaveRider:

One more thought.

Success will never depend on being able to get every drop of the juice out of every trade. More important than that is to be able to consistently pick the gentle winner each week or each month.

So - if you take your STEM profits and put your money into something that makes you money next week - you are still winning in a big way. Those big moves like STEM do not come around often enough to use them as your real method.

STEM has worked out well for you.
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candlestick1
Site Admin


Joined: 27 Jun 2004
Posts: 503
Location: Houston, Texas

PostPosted: Fri Jan 07, 2005 9:55 am    Post subject: STEM Reply with quote

STEM appears to be getting toppy. This is an area where greed and fear come back into our investment psyche. We want to catch a further big move if it comes and we would fear selling at this level and missing out on more upside.

The best way to modify that fear and greed is to take off half the position.
There is nothing wrong with taking 100% profit. If it starts backing off, close out the rest of the position. If it continues to move higher, there is nothing wrong with riding along with still half your position on.
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tab321



Joined: 22 Jan 2005
Posts: 368
Location: Texas

PostPosted: Sat Jan 22, 2005 11:55 pm    Post subject: STEM Reply 2 Reply with quote

STEM still looks very toppy. If you used my mentioned Stop Price, you were taken out on the 10th when it breached 5.26. Had used used the ATR*3, you would still be in. Of course, since Jan 6th....STEM has only gone up 2.5% so it was pretty toppy and it now has a Bearish Engulfing Candle. It will be hard for this one to rally without pulling back.

We gave you our thoughts....tell us what you did and how you managed the trade.

From Previous Post:
Quote:
If you want a mechanical stop loss - set your exit a 3*Average True Range which is about 4.21 or 27% below the close on Jan 6th.

If it were my holding, I would stay in until it breached the 5.26 area. That is my call.


TBeard
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cmant1



Joined: 22 Jan 2005
Posts: 17

PostPosted: Sun Jan 23, 2005 7:43 am    Post subject: Stem Reply with quote

Looks like it formed a shooting star followed by a doji and may be considered a bearish Harami in the last 3 days. Still (learning)
On the shooting star the MACD AND STO was at the high end and is all headed down from there. Will test the middle of the gapup or kicker on the 18th mid range 5.63 10 day mvg. If it breaks that may find support in the gap up on the 4th mid range.
I felt this was breaking down.
Just an opinion.
Its hard going back an forth into the chart. I wish people would copy and past charts into the ?
There is a good link in one of my ? posted that someone informed me how to copy and paste into a chart and a site of how to keep it on the net instead of your hard drive.
I haven't recieved tc net yet. I hopefully will paste a chart on my questions. As long as TC net allows this.
Trade & fish hard and lines tight!
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