buying when people are scared can blow up in your face, because sometimes they are scared for the right reasons. I prefer to time my buys when there hasn't been much change or any publicity for 1-2 weeks at least.
other than this minor point I agree with what you say, especially that it's a bad idea to rely on greater fool theory. Don't buy something that's being hyped up. only god knows how can all these funds continue to pump money into stocks like AMZN FB NFLX? (especially FB - it's never ending hype&pump with hundreds of ritalin kids on the forum...)
Also, are you saying a low volume drift predicts a drop? look at the other stocks that dropped. OLED, RBCN got beat up today and it does not seem like they had unusual volume the few days before. Maybe GTAT was just following other things?
What low volume does tell me is that the stock will be easier to drag along with external forces (like related stocks and macro news) when there's essentially no resistance in either direction. Whether thats good or bad depending on which direction those external forces take it ... and where you want it to go :)
to add to the tail wags dog comment... you see a trend continuing because it's a trend and that's what trends do, and when it breaks you expect a big correction because that's what happens when a trend breaks. but did it occur to you the change in price simply followed the news? which so happened to be mostly positive for several months now.
I see the news as the dog and the trend on the chart as the tail. The first rumors came up with GTAT at $2.8. I remember it very clearly.
Put GTAT over RBCN or a few solar stocks. See how much they trade together. Where in your charting does it take into account those positive correlations?
hypothetically, if TA says S&P FSLR TSL etc are all uptrending but GTAT is correcting, which TA would you believe? I'm curious how you're supposed to integrate everything. In my view, if you are given that solar/LED/sapphire are all crashing for the day and GTAT is trading low volume, then GTAT dropping with them is an immediate result. It has nothing to do with any TA considerations.
This is somewhat accurate.
a big component in the valuation is macro conditions though, which are not speculative in the sense that it does not depend on GTAT or its stock trading in any way. If market corrects big, GTAT drops. If solars report crashing ASP's and inventory pileup again, or LED utilization drops, and so on, then the stock will get killed. But it did not simply move up because of hype about sapphire devices or because people are trying to time contract announcements.
look at the 3/6/12 month charts on those stocks and tell me with a straight face they have nothing to do with each other?? you have to be blind not to see it. its right there in the chart (heh)
Not sure it's a clever idea, trading interest particular to this stock is low in recent sessions and it will get pushed around whichever way the market+sectors drift. You have to keep in mind the rallies have been pretty huge. Perhaps they are fully justified, but expect some price discovery to happen. It wouldn't surprise me if some high flying solars got corrected 30%, for example. This kind of trading will drag GTAT along if it happens. I wouldn't rule out low-mid $5.xx in such a scenario.
GTAT is still good for buy/hold but I wouldn't try to swing trade it right now.
Also, I tend to generally dislike trading long on a stock I'm holding for long term. It will invariably fail at one point and it's easy to fall into the trap of "oh well I'm already long on this anyway" and just keep holding it for years along with your other shares. You end up increasing your long term risk without really getting the reward for it (since if it goes up you exit the "trade" at only a small profit).
China, the world’s biggest maker of solar panels, will limit construction of new photovoltaic manufacturing plants to curb excess capacity, a move that may spur consolidation within the industry.
New solar plants that “purely” expand capacity will be strictly banned, the Ministry of Industry and Information Technology said in a statement on its website yesterday. Annual spending by companies for research and development and upgrading equipment must total at least 3 percent of revenue and must exceed 10 million yuan ($1.6 million).
so, in short, GTAT should be expecting more orders from them, not that it should come as a surprise.
It's just that China's economy is planned in a more direct way, so it's the govt making this decision for all manufacturers. Good for them, they have a lot of non-competitive capacity out there.
what do you mean bull market? the 670 to 1700 move on the S&P was the "bull market", those buying today have already missed the boat on all that. Or are you expecting it to keep going to like 4000? I think most of the money has already been made. Markets should go sideways or maybe a little up/down in next few years.
As for FB, almost all realistic upside is already baked in at a market cap of $110B, pie in the sky dreams about $100/shr ($244B cap) require that we really stretch our imaginations and that's just a 2 bagger at this point, in a stock that has so many downside risks it's not even funny. Of all the equities you guys looked for, this is really the best buy you found? really now...
not that there's even a gap, it started from last session's closing price. but whatever...these guys and their technicals. let them believe the tail is wagging the dog.
The one trillion dollar website, that's such a big joke. You even know what the valuation of a company means?
For a company to be worth a certain value - a trillion dollars, in this case, one has to expect it should produce that amount of future return. In FB's case, no company is large enough to buy them out, and certainly not for a trillion, so all this amount must come from net profit - dividends, and an increase of equity in the books. Counting only assets that can actually be sold off for the price they have on those books.
so once you project these expectations to infinity and discount them to present value, you need to end up with a trillion dollars.
Now obviously it's a tech stock, and it's not IBM or MSFT, so dividends are out of the question. Not to mention, the only reason this company has $13B equity in the first place is because they sold a bunch of shares for lots of cash in their IPO. Equity is not increasing appreciably since then. And if you think their equity can even reach the hundred-billions range I got a lakeside property to sell you in the Mojave desert.
But FB bulls expect their stock to trade like some kind of expensive jewelery, rather than a financial asset. And small wonder, if you actually believe you're getting a good deal buying at $110B market cap.
inb4 on_phire comes in here saying he was holding 150% in GTAT from $6.3 to $7.7, sold it all and already made another 20% on it somewhere else. He'll say the technicals behind this run were so completely obvious, that he didn't even wanna bother posting about it, that the next resistance points are $7.73, $7.91 and $9.24, and if it doesn't break them it will drop off to high $6's or low $7's.
It's lagging behind RBCN and you're shorting. For all we know, GTAT could be being pinned to $7.5 for OPEX, but if RBCN and/or solars keep going, well, to quote Walter from The Big Lebowsky, "you're entering a world of pain".
But, there have been worse times and places to short, to be sure. It has a decent chance of working out for you. I'm not trading this so I don't particularly care. gl, anyway.
it's like in poker though, you should try to consider the merit of your decision making based on the information you had at the time you made the decision, not in hindsight.
With that said, this stock is definitely shaping up to be a huge win.
nothing moves in a straight line up. One cannot expect markets to behave that orderly, the trading volume today is already quadruple the normal daily amount and it's only halfway through!
buying into a 20% bump off the gate is a reckless thing to do, mostly done by wild eyed speculators and "momo players". Patient buyers are getting in near $8 and probably some are waiting for high $7s. The speculators, and the shorts from yesterday, they lost money today. Don't know what's to complain about.
you don't actually "believe" anything. you don't believe what you just said. You say you believe it was a moronic upgrade because you're trapped short and want to reverse your position. Once you've done that, it's a brilliant upgrade and GTAT is going to $100 tomorrow. until you sell again.
JKS doing a secondary, YGE and TSL are up big, but GTAT gets taken down anyway. Can't really complain, I'd hate to see the "momo's" make money on this, so they have to get shaken out first. Shouldn't take much longer. Perhaps another dive to near $8.00 should do it.
If you want to see a truly incredible chart take a look at LVS 2008-2013.
How about maybe your choice of the PV solar manufacturers (SPWR TSL JKS DQ) being 7-baggers since Nov 2012? GTAT's rally is modest in comparison.
Circumstances change and the price with them. For the price to go back down again, the circumstances have to change for the worse again. There's the problem, you think prices change by their own will, or maybe because the RSI gods will it. That is why your conviction is entirely meaningless in either direction. You first decide at what prices you will try to trade something, and then argue the price should move based on that, rather than you know, actual market forces.
The simple truth is, if things change for the worse over the next few weeks, the market will move the price where you want it, if they don't, it won't. Enough time has passed now that $8/$7.5 would break if it was simply the result of some short panic (squeeze) or a bunch of momo's trying to rich in a day. Well, it didn't break. Willing it lower won't help you.
I did not expect the price to increase at such a rate, but given all that happened I can hardly say it has over-extended, there is plenty of upside left, if you didn't think that way yourself you'd obviously move on.