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ITT Educational Services Inc. Message Board

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  • oxledge oxledge Jun 1, 2009 5:49 PM Flag

    I'm Baaaack

    YES, RAV, your comments are useless....specifically you comment...

    "Some more useless TA: the high on Friday was at the 200-day MA. One more failure to get above the 200-day and I will short. When it gets under 90 I will short more. This is easy money here."

    all one has to do is look at the daily chart in early May to see how ESI "failed the 200 day moving average on 3 consecutive days. The technical analysts were all excited and in a tizzie as the shares started to fade, preparing for the much anticipated breakdown into oblivion. Shorts were piling on heavily in the $92-93 range as the failure of the 200 day ma was "so clear".

    Well, something interesting happened. The stock went from $92 to $105 like a rocket ship and the shorts got absolutely squashed in the process, losing huge amounts of money.

    Any idiot that can look at a chart will also see the last breach of the 200 day moving average in October of 2008. In that case, there were several "significant" failures of the 200 day moving average. Interesting how those prices (around $75 a share) proved to be a complete disaster for the shorts and represented one of the best buying opportunities for the year as the shares gunned from $75 to an incredible $130 in 3 months in a stock market that collapsed.

    The late 2007 breach (at $105 a share) of the 200 day moving average was profitable for the shorts, but this was not accompanied by the stock bouncing back up into the 200 day average. Instead the stock went through and kept falling, not giving you the ice hole failure of the 200 day moving average that you are talking about currently.

    So much for your 200 day moving average garbage. At best one could say that your "technical analysis" is correct 1 out of 3 times, with significant losses incurred by the short sellers. On the 2007 drop, you never would have gotten a short off, so that trade can't even be counted in your favor.

    In the end you may get lucky and ESI shares (like any stock) could drop. But it wont be because of some incredibly astute differentiated technical analysis viewpoint that you have presented here. Your technical analysis is a total joke.

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    • It is meaningless to compare today's chart with past action during times when the overall market was acting very differently. But since you did:

      In early May the stock recovered from oversold conditions only to make a lower high and re-affirm the underlying downtrend. Sure, the stock had a nice 15% move in 4 days, but since you are not a trader, that move is meaningless since the stock is now right back near those lows.

      In October 2008 the stock market was in the midst of a crash of historical proportions and the bear market was fierce. The for-profit education group became a bear market leader. Time's are very different now with the market in the midst of a broad rally.

      You are wrong about the 2007 breach. It was lost on 12/8, then regained on 12/10, then lost again 12/11. Not sure why you bring this up because it supports my TA. This 200-day breach was a textbook short signal good for a 57% drop.

      Even if you didn't take the shoft in December, another signal presented itself in early January when the 50-day crossed the 200-day to the downside (death cross). Shorting at 85 was still good for over 47%, if you were not shaken out during the brief rally to 95. That rally is eexhibited yet another textbook TA signal: failure to regain the 50-day average in late January sealed the deal.

      TA is far from useless. It gauges the psychology of traders. Despite the fact that you think you know everything about this company, there are institutional investors who know a lot more than you. Failure to accept that is arrogance.

      • 1 Reply to rav3_d
      • rav-ingidiot,

        i was curious as to how you were going to spin the technical analysis about your losing 200 day moving strategy to make it sound good. What a lame attempt. The other technical sell short signals failed becuase the "environment was different". How convenient. Of course the market environment was different. Every day is different. Your arguement is just lame.

        I defy you to produce statistics that show the success rate and rates of return of a 200 day moving average breakdown strategy or a 50/200 cross strategy. You have no such statistics. If you did have them, I suspect that you would not be deploying these technical techniques for trading. But, I am open minded. You can run simulations for every stock in the sp500 for the past 20 years and produce the statistic analysis.

 
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