Chart analysis

Discussion in 'Stock picks and trading strategies' started by TonyM, Sep 21, 2006.

  1. TonyM

    TonyM Active Member weekly contest winner

    There seems to be an abundance of well informed traders on this forum, so I thought I'd seek out some advice in an area that I have very little knowledge of:
    I would like if someone with the technical charting skill who has the time would give me an opinion on a trade that's gone against me so that I may have more information on which to make my decision on where to exit this position. The stock in question is DK, a refiner and retailer through convenience stores with the refinery operated in Tyler, TX. DK went public on 5/4/06 for $16 ps

    Thanks for any input.
  2. bahroor

    bahroor Active Member weekly contest winner won dec/06 simulator

    In my opinion Tony....
    DK could possibly be in a downtrend (notice how it failed to make new highs 3 times in a row).
    It looks like it has support at around $16, if it falls through that, the next support is at $15 then $12.
    I don't know what your entry price was, but if I were you, I would set my stop loss around $15.
  3. Svenwulf

    Svenwulf Active Member won weekly contest 2x

    disclaimer: the following is from another oil bull who is in denial, and some pain. although i am an actual trader, i do not play one on tv.

    technicals... grrr. well i know this is not my strong suite, but looking at a 6mo on DK, you see a pretty clear head and shoulders or triple top. course thats all hindsight, cause you wouldnta bought it if you knew it was gonna make that. technicals will tell you whatever you want to hear- at least they can confirm it the next day. but the last week or so, you see the same graph pattern, only much much smaller. more dandruff shampoo right? well when they happen at a bottom like that i think they call em tripple bottoms, or inverse head and shoulders. so now comes the soul searching. will this be a bottom, or merely a dead cat? more importantly, should you double down to try to trade out of a looser, or should you just harvest the wash sale on the next bounce? only you can answer these questions for yourself- i could quote all the tripe about no one making money by panicing, or instead, about the trend being your friend. but why did you buy this stock? what has changed to justify this pps move? news trumps charts: homework, homework, homework. what was your entry strategy, what was your exit strategy? what is your maximum amount of pain? why have trouble sleeping at night, when you can just try and go make it back? i apologize for the rambling, hope it helps.
  4. TonyM

    TonyM Active Member weekly contest winner

    Thanks for the input guys.

    No sign of a bottom to you then bahroor?

    Sven, I have been thinking about getting out on the next bounce...seriously considered it on Monday when my loss dropped to about 10%, however I took 2 small losses earlier this year that were followed the next day by what would have been a profit and that voice keeps whispering that to me every time I think about selling. Why did I buy? Good looking company with low multiple and good Q2 earnings and some insulation from crude through the retailing's the kicker; Ernesto tracking for the GOM (at one point), then Mother Nature bitch slapped me and worldwide peace apparently broke out causing anything that even smells like oil to get steamrolled.

    My exit strategy was the dreaded mental stop, max pain? Tough to say, as long as only the stock is broken (as JC says) then I've got to believe that this is a short term deal, however if the company itself suffers at all, I'll have a mess on my hands. The problem with newly traded companies is that there isn't enough information out there (for me, I'm a readaholic), Lehman did downgrade it the other day, but I viewed that as a plus since the analysts seem to only do so close to the bottom.

    Indeed why lose sleep over it (because I hate losing at anything, especially money) when I could bite the bullet, sell and concentrate on making other trades? This is why I'm seeking alternative (to my normal methodology) advice, I'm trying to determine if I'm still thinking straight after taking a beating for 3 weeks in a row.:|

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