Our previous fun trade, which we were eyeing for today (Visa) died even before the market opened. It is quite difficult (atleast for us) to predict what happens during earnings. Therefore, we rarely play stocks into earnings. Anyways, we are eyeing another promising fun trade in the formation. The above chart is of GIGM. As can be the chart has a nice ascending triangle with bullish divergence on the MACD and rsi. The first target for us is 14 on this, if the breakout does happen, which could be a nice quick 10%. If the upward trendline does get violated, we bail.
Thursday, July 31, 2008
Fun trade(II) -- GIGM
Our previous fun trade, which we were eyeing for today (Visa) died even before the market opened. It is quite difficult (atleast for us) to predict what happens during earnings. Therefore, we rarely play stocks into earnings. Anyways, we are eyeing another promising fun trade in the formation. The above chart is of GIGM. As can be the chart has a nice ascending triangle with bullish divergence on the MACD and rsi. The first target for us is 14 on this, if the breakout does happen, which could be a nice quick 10%. If the upward trendline does get violated, we bail.
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2 comments:
so, did you bail on GIGM? Looks to have broken that support, but it's been hanging around just below it for a while now. I'm tempted to buy some here, but I'm new to TA and not sure how significant this action is... do you see this as a passed opportunity now, or maybe just a gentler uptrend?
Cheers
Today's action was not what we were looking for. We would have liked an action as in PIR (which has a similar set up) and is doing much better.
We did not buy GIGM. The safest thing to do is (while playing fun picks) is to buy on the breakout of the resistance on strong volume. Ofcourse, you could buy at the lower trend line etc. but only if the stock is strong or in flavour (like the ag stocks etc.), not GIGM.
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