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Skullcandy, Inc. Message Board

  • bigturtle3 bigturtle3 Oct 19, 2012 2:39 PM Flag

    Well well ....

    Gut check time now eh fellow longs? Hitting the lower Keltner channel - thats all you non-chart guys need to know - Buying more at 11.95$ Here's hoping ....

    Turtle -

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    • Keep in mind, except for his long-term holding, Turtle knows when he is wrong and gets out.

      I say this because you just can't use Keltner channels by themselves. They're simply a moving average, usually a 20-period MA, with average-true-range (ATR) offsets which form the channel bands. Usually the channel bands are 2 ATRs above and below the MA. For SKUL a factor of 2.5 ATR's (using the same 20 period averaging length) seems to fit the data better. How you use Keltner channels depends on the trend condition.

      I would argue that a major downtrend is forming. Not just the downtrend since 14.58, but from 16.75. The Keltner channels confirmed the strength of that downtrend when Sept 13th closed well below the lower channel band and then on the reaction failed to get up to the upper Keltner channel band. So, to expect a bounce just because it hit the lower band could be wrong; is likely wrong. The price can continue down pushing the Keltner band down with it.....because it itself confirmed a major downtrend.

      SKUL closed Fryday at 11.94 and printed a low of 11.89. The low 5 cents above the Sept 13 low of 11.84. Close enough test to bounce? Could be close enough to bounce but I don't like that it didn't get the test particularly on a Fryday. Over the weekend folks will stew and decide to throw in the towel and it could open Moonday with fresh energy to bust lower.

      But even if it bounces, the upside is limited by the bar of Sept 14th, with a low of 12.27. That bar is now resistance. Monday's daily pivot is at 12.09. The weekly (5-day) pivot is at 12.37. So, monday there is a 70 to 80% probability of hitting 12.09 and for the week ahead a 70-80% chance of hitting 12.37. Monday's 1st daily pivot resistance is at 12.29. So, I'm expecting a bounce to near 12.37 with a close below Sept 14th, 12.27.

      The 1st daily support Monday is at 11.74 and the 2nd daily support is at 11.54. The first weekly pivot support is at 11.46 and the 2nd at 10.98.

      This is why I'm not long yet.

      • 2 Replies to onepoint272
      • No I agree keltners alone are not th whole story - but i think as the stock falls the fact that I was getting back into it as it hit the Keltner just gave me a weeee bit more confidence - I dont have a problem making a stand her below 12 - If it cracks below 11 I will take my medicine and move on - but so far this has been the best trading stock I have found in a long time - and they make pretty nice headphones too!

      • OP,

        I do respect your technical thoroughness and frankly wish I had listened to you and PB's advice back when the stock was at 16 (for reasons I wish not to disclose - I was stuck there).

        My main question, and I want an honest opinion here, is what if SKUL hits Rev and Earnings and more importantly beats and gives upward forward guidance? The PE of this stock is expected to dive based on 2012 and 2013 guidance.

        In the short term I see the error of my ways. Long term I still feel the risk reward is there. IMO

        Sentiment: Strong Buy

    • Not worried buying more here

      Sentiment: Strong Sell

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