OVTI obviously has been a strong bull long-side recommendation of ours over the course of the last year and a half on many occasions, and this stock was a superstar, moving from the 5 �-6 area up to the low 50s, having reached all our targets. But it appears that over the last 60-90 days the stock has waned its bullish momentum, showing deterioration in technicals and perhaps the beginning of a rollover head-and-shoulders topping-type pattern. Although we are anticipating a bit, it appears OVTI may be ready for some downside action. The sharp downside break at the end of September on heavy volume was the first signal and broke the internal trendline. The stock then hugged that trendline on the way back up to retest its highs and make a lower high, before rolling over again last week. Volume has been very poor on the rally, technicals have deteriorated dramatically, particularly on Balance of Power and Money Stream, and it appears OVTI is headed lower. Very strong support exists around the 40 level, which has stemmed all declines over the last 90 days. That would be the first test. Any move below 40 or so could lead to a secondary drop to around the 35 � area, followed by an intermediate to longer-term target around the 30 zone. Beyond that the stock is vulnerable to much lower levels, but we�ll use those as our short-, intermediate- and longer-term targets for now. On the upside, any break back above 50-51 would be cause for concern, and particularly on heavy volume the stock should be covered.
This is the "Bible"- Edwards and Magee.
Also check Murphy, another one of the best.
Thanks, i'll read one. Do you have a title you can suggest? Looking at the volume and news around sept 23 I would venture to guess it was J.P.Morgan's paying clients getting the jump on their coverage initiation. Good luck with the technicals.
<<<Does technical analysis require a person to suspend all common sense? >>>
LOL No, but TA often shows underlying weakness in a stock,trends starting to change, etc. This can lead you to trades that often seem to go against "common sense".
Kind of like buying last Oct- most people were preaching more doom and gloom- I made good money buying-charts said a bottom was in place.
As for OVTI, there have been plenty of bad tech signs, indicators that are too complicated to go into, but also things like up on low vol days, down on high vol days, selloffs when the market rallied, etc.
Lots of traders are short OVTI purely on valuation-valuation means nothing to me-I'm interested in where the stock is going.
Charts aren't a crystal ball or a Holy Grail, just a valuable tool. I make a living doing trading, and certainly wouldn't do it without TA.
Got caught with pants down on this one, but this is a good trading stock and I'll be back in.
You might want to get a good basic TA book and look at charts more than occasionally.
I don't own a ouiji board or tarot cards, I just look at charts occasionally. What could anybody see in the charts that would show weakness in this stock? Yes, sometimes volume slows down a little with a lack of any new information. Does technical analysis require a person to suspend all common sense?
I'm not a tech trader subscriber, someone else posted his comments. I will have to say though that I agreed with his analysis- OVTI's technicals were hurting. If not for this good news, ovti was in for a decline. The technicals didn't hint at this news coming, though it might be said that the price was holding up a little better than it should have been. That in itself really wasn't enough basis to be long.
Like I said, I'll probably move to the long side if I can get a little pullback. Plenty of time before earnings for it to continue moving up. And like someone said, they may even beat the new guidance.
I've got nothing against this company, and trade both sides, it's just that it was obviously running out of steam. Fortunately for longs, the fire has just been stoked!
the techtrader says " I'll sell you bogus advice because I don't stand a chance managing my own account" ! I think I'd ask for my money back. 24% of this dog still short, how much pain can they endure before we see some serious covering? inquiring minds want to know.........
<THE " JERK " that tried to help the rookie.>
That's right. Calling somebody a rookie because they were on the wrong side of a couple of trades? Please.
And I assure you I don't need any help/ I'll lose less than 4K on this and lost 2.5K on last month's strike. No biggie, although I hate to lose any time. Trust me though, my net for the month will be just fine. In fact, a put position in ERTS more or less negates this loss.
I don't win 'em all but I come out ahead.This should be a good long on a pullback now.
I started playing this stock long and will probably go long again now.
Fortunately my puts were slightly out of the money when I got them so it could be worse.I'll make it back on the long side won't I.