KNDI has shown a bit more strength today expected and did break above the 8.50 intra-week resistance level that was considered a decent resistance. The next level of intra-week resistance is at 9.20, which is a level of resistance as strong as the 8.50 level was. A break above 9.20 would be an accomplishment by the bulls as the $10 psychological level would become a magnet. By the same token, the key issue this week is the 200-week MA, currently at 8.25, and that is a level that is highly unlikely to get broken on a weekly closing basis (Friday). With there having been no news of consequence to explain the rally today, the chart still strongly suggests that a drop back down to retest the 5.05 low (likely a drop down to the 5.55-5.75) will be seen. By the same token, the rally above 8.50 today does suggest that the bears have lost some control of the downtrend and that the buying is not only short-covering, also meaning that a drop back down below 6.00 should be bought.
Fundamental investors will always have problems looking at the peaks and valleys that occur with all stocks. They look at the fundamental picture and usually say "the fundamentals support higher prices" and as such "I cannot see the stock moving lower". Nonetheless, often fundamental investors are basing their price evaluations on where the stock previously was and then make the evaluation on price based on how much the fundamentals have changed for the better or for the worse.
Prices on stocks are often "somewhat" subjective, inasmuch as much of the price is speculative and not based on actual book value. As such, what you personally consider to be a good price, could be considered cheap or expensive by someone else doing the same fundamental evaluation.
In addition, you are not taking into consideration that a large portion of "traders" are not looking at the long-term picture, just as to how to make money "today and this week", meaning that they will push in whatever direction they feel they can have success on a short-term basis. As such, chart support and resistance levels are what they use to measure what they can do. Example: KNDI was a $5 just a couple of weeks ago and is now at $8 and yet there has been very little fundamental change. The investor say "hey, people are waking up to the fact the stock should be worth more" but the trader says "this stock can trade "between" $5 and $8 because it was at $5 just a few weeks ago".
It is difficult for a fundamental investor to change his way of viewing a stock and that is what prevents him from seeing the peaks and valleys that always occur in stocks.
There was one negative today that needs to be mentioned. The stock generated a negative reversal day, having made a new 4-week high but then going below yesterday's low and then closing in the red. Negative reversals often signal a change of mentality.
On a positive note, the negative reversal was on the daily chart and not on the weekly chart, which leaves the door open for the stock to go above this week's high at 8.08 next week. and get up to the 8.25 level. The stock closed in the upper half of the week's trading range, suggesting that further upside above this week's high at 8.08 will be seen next week.
By the same token, the negative reversal on the daily chart does suggest the selling interest has increased at the 8.00 level, likely meaning that even if the stock does go above this week's high next week, that the selling interest will not only be there again but likely even more as the 200-week MA is a level of resistance of consequence. Any kind of negative reversal has to be considered a weakness in the armor of the bulls.
Simply stated, this week's action does not support the bulls as much as you might think it would.
Original evaluation of the stock remains. The stock is likely to have found (or to find next week), a top to this rally.
I liquidated my positions in KNDI at 8.02. Profit on the trade of $295 per 100 shares minus commissions.
I am interested in the long side of this stock but I believe that a retest of the 5.05 low will be seen before a serious attempt to break the 200-week MA, currently at 8.25, will occur.
The stock is likely to move up a bit higher, up to 8.25 perhaps, but there is weekly close resistance at 8.04, meaning that the stock has accomplished reaching the upside objective and trying to "squeeze" an additional 20 points out of the trade is not worth taking the risk that the stock will drop from here.
I have already answered that question before.
I said that the chart suggests the stock will find a top to this rally somewhere between 8.00 and 8.50 and then move back down to the 5.55-5.75 level.
On the other side of the coin, this chart (UGAZ) looks very negative. I see nothing on the chart at this time that would be considered an opportunity to buy. Chart suggests lower prices to come.
The ABX is an interesting chart. Thanks for bringing it to my attention.
Your outlook for $10 is a valid one, though the time frame of "by New Year's day" is not all that clear.
There are quite a few things on the chart of interest. First of all, the stock seems to be in the process of building an inverted Head & Shoulders formation with the left shoulder at 6.52, the head (and also double bottom) at 5.91/5.95 and the right shoulder "in the process of being built". The 200-week MA is currently at 10.30 is certainly an objective that will be reached if the H&S formation is built and the neckline broken. The neckline is presently the line drawn from the 8.51 high seen on August 20, to whatever high is made this week (presently 8.20).
There are a few questions though, such as the fact that the chart shows a breakaway gap (6.94-7.05) and a runaway gap (7.65-7.70). If the bulls can get the stock above 8.51 on "this rally", that breakaway/runaway gap formation will be valid. Nonetheless, if the bulls fail here, and the stock drops back down to 7.65, the breakaway gap at 6.94 would be closed as well.
I will put this stock of my list of potential purchases. Presently I would buy the stock somewhere between 6.52 and 6.94, use a stop loss at 5.65 and have at least a 10.00 objective. Such a trade offers a 4-1 risk/reward ratio, which is the minimum I use to do a trade.
The long term chart does suggest the stock could ultimately get back up to $13 and if things go really well, up to $20.
Thanks again for bringing this stock to my attention.
I disagree with your statement totally. Whether institutions are involved or not (and in this you are right, KNDI is not big enough for them to be), charts are a measuring stick that all traders use simply to keep a "scorecard" on the movement of the stock. Without charts, traders would have no idea where to buy, where to sell, or what the stock action means. Explain to me why the stock stopped at 5.05 and turned around. There was no fundamental change in the company. Why 5.05 and not 5.43, or 5.82 or 4.54? It stopped at 5.05 because the 5.00 level has proven to be a previous chart support/resistance in the past.
As far as your statement about a "classic" V bottom, let me say that you are also likely wrong. V bottoms are usually associated with news that causes an immediate rally (a V so to speak). In addition, a V bottom is also associated with "some" resistance level of consequence breaking. None of that has happened.
You say that you believe in long-term charts? Well then please explain to the readers what the 200-week MA means. The 200-week MA is a major line that signals "long-term" trend. It was broken convincingly the first week of July and all you are seeing is a short-covering "bounce" back up to "test" the line. It is highly unlikely that the MA line will be broken to the upside "without" a change of fundamentals (positive news) or without some strong "support base building" as breaks of a major line require a lot of base building before traders or investors get involved, at least if there has been no positive news.
I will likely be liquidating the positions I bought at 5.07 tomorrow. I expected the stock to get up to at least 7.96 (which it did today) but more likely up to the MA line, which is at 8.25. The probabilities are high that the stock will get up to that line tomorrow but are very very low that the bulls will have success in breaking above the line 2 weeks in a row, which is something that is required for a line like that to be broken.
By the way, let me give you an example of how a "buy and hold investor" can use my service.
One of my ex clients was a buy and hold investor (never used any of my mentions). Nonetheless, he heard about me when I was putting comments on the NUAN board (SSFT at the time we met). He held 150,000 shares of the stock that he had bought originally around $3. He was ready to take long term profits on the stock when it hit $20. He asked me if chart-wise it was the right time to get out. I looked at the chart and stated that the probabilities were high that the stock would get up to $22 before it stopped. Because of my comment, he waited until it got up to that price and he exited his positions at an average price of 21.60. He gave me credit for making him an "additional" $240,000 in profit as he was ready to get out at 20.00.
About 9 months later he came back to me and said he was ready to buy the stock back. It had dropped down to $8. He asked me if it chart-wise it was time to get back in. I looked at the chart and said it was likely to get back down to $6.50-$7.00. He waited and he got back in at an average price of 6.85. He gave me credit for getting in at a lower price and saving him an additional $172,500 in profit potential. Having made an additional $412,500 in profit. Do you think paying the $27.95 monthly subscription fee was worth it to him?
You scoff at my ability to predict a $3 move ($5 to $8) in KNDI and say "anyone can do it". I say, you don't know what you are talking about.
Well, I have to say that I have concluded that you are an "uninformed critic" that has a bad mouth to go along with.
You know absolutely NOTHING about my service, my results, and about the results of my subscribers. You have not yet asked one single question so that your comments "might" be based on information rather than on wild speculation and assumption. To me, that is real idiocrasy.
I will have you know that I started the service in January 2007 with 9 subscribers and after 8 years, 5 of those subscribers are still with me. No one pays a monthly subscription fee for "8 years" if they are not receiving the kind of information that is helping them trade more successfully. In addition, I started back trading in 2003 and have averaged a 60% return on investment yearly. Would you call that "useless and insignificant?"
Every single time you open your mouth you put your foot in it. Perhaps that is why you mind is so confused, having a foot-in-mouth makes it difficult to think or concentrate on anything else.
If there has not been a dramatic change of fundamentals, bottoms are usually built by retesting the low made at least once. More often than not, a second or even a third retest is necessary before the trend changes.
In addition, without a change of fundamentals, most downtrends do not reverse into uptrends but first turn into a sideways trend that may last quite a bit of time before an uptrend begins.
It really is common sense. Traders are not likely to buy aggressively something that has been going down for a long time. They need to see buying interest to begin with but the probabilities are high that the first bounce from a low is "short-covering" and not "new" buying interest. Then, the trader wants to see if the buying interest is still there (at the same price) "after" the short-covering is finished, meaning a drop back down to the previous low. In the case of big downtrends (such as KNDI), even if a successful retest occurs, the traders are still "wary" of buying the stock aggressively, meaning a second or third retest is necessary.
No, you are right about SNDA. The stock traded as high as $41 during that year, meaning that the stock has about a $20 trading range. In addition, it was a volatile stock, meaning that it often generated $6-$10 trading ranges every few weeks. I do often look for volatile stocks as those are the ones most preferable to a "trader".
As far as your 5-year run between 2008 and 2013, it was somewhat to be expected because the most profitable times of a buy and hold investor are those when a stock "and" the market are on a strong and well-defined uptrend. Nonetheless, during periods of sideways action or a downtrend, the normal buy and hold investor loses money and that has been the case for 10 of the last 20 years. As a trader I do well under all situations but less so with an uptrend a "slow and steady" pace to the upside is not "my thing". I do very well with downtrends since they tend to be strong and fast and also something that is normally strange to most investors, meaning I often have an "definite edge" when the market is heading lower.
I must be honest and tell you that I am NOT a millionaire. I went through a messy and bad divorce in 1998 and had to start from "scratch" at age 54. I started back trading in 2003 with $5,000 and with that kind of capital it is very difficult to "make it happen", at least on a short-term basis. I now have a $350,000 trading portfolio and have lived off the portfolio since 2007 when I retired. Nonetheless, I have been averaging about a 60% return on per year on my trading. Not bad!
You can go to my website which is theoasisclub(dot)net
I do put out a weekly newsletter on Sundays that includes chart updates on the indexes, on all mentioned and held stocks, as well a up to 4 new mentions per week on stocks that I feel offer good risk/reward ratios as well high probability ratings.
In addition, I offer 4 chart evaluations per month on stocks of your choice.
Since the probability numbers I give are based on my own experience on looking at 1000's of past charts, it is difficult to give you personally a way to measure them unless you had been a subscriber for some time. Nonetheless, I do use 3 levels that I use, which are low, decent, and high. By the same token, since I usually do not comment or trade much on a "low" probability, I would say I use 2 levels mostly.
Below is the second part of the monthly results, which is the running total of ALL the mentions given (After commissions and losses subtracted). You can go back and check each and every month's newsletter for the past 8 years and you will see that LOSSES and COMMISSIONS and included in the Total.
Status of account for 2007: Profit of $9,758 per 100 shares after losses and commissions were subtracted.
Status of account for 2008: Profit of $14,704 per 100 shares after losses and commissions were subtracted.
Status of account for 2009: Profit of $7,523 per 100 shares after losses and commissions were subtracted.
Status of account for 2010: Profit of $24,045 per 100 shares after losses and commissions were subtracted.
Status of account for 2011: Profit of $3,616 per 100 shares after losses and commissions were subtracted.
Status of account for 2012: Profit of $3,399 per 100 shares after losses and commissions were subtracted.
Status of account for 2013: Profit of $15,886 per 100 shares after losses and commissions were subtracted.
Status of account for 2014: Profit of $21221 per 100 shares after losses and commissions were subtracted.
"guys like you only talk about the hits they make, never mention of the losses".
You are WRONG. I am totally transparent and that is why my subscribers believe in me. I give all (losses and profits). Below is last month's recap on all the mentions I gave during the month, as well as on positions either closed on new ones put on.
In addition, I have stated several times my results "include commissions and losses subtracted". Evidently you are SO BUSY trying to criticize that you don't even pay attention to what you are reading. Classic bully mentality.
Status of account for 2015, as of 9/1
Loss of $3831 using 100 shares per mention (after commissions & losses)
Closed out profitable trades for September per 100 shares per mention (after commission)
CAT (short) $1850
Closed positions with increase in equity above last months close minus commissions.
NFLX (short) $2596
KMX (short) $579
PRAA (short) $75
PHM (short) $162
WMT (short) $169
IBM (short) $1628
Total Profit for September, per 100 shares and after commissions $7059
Closed out losing trades for September per 100 shares of each mention (including commission)
Closed positions with decrease in equity below last months close plus commissions.
PGR (short) $107
LVLT (short) $161
Total Loss for September, per 100 shares, including commissions $268
Open positions in profit per 100 shares per mention as of 9/30
KNDI (long) $18
Open positions with increase in equity above last months close.
ENG (long) $0
Open positions in loss per 100 shares per mention as of 9/30
ARNA (long) $17
Open positions with decrease in equity below last months close.
ARNA (long) $240
AREX (long) $207
FCEL (long) $24
XOM (long) $198
FSLR (long) $2036
Status of trades for month of September per 100 shares on each mention after losses and commission subtractions.
Profit of $4087
Status of account/portfolio for 2015, as of 9/30
Profit of $256 using 100 shares traded per mention.
"This confirms you are an idiot"
One simple question. Why do you feel the NEED to be insulting?
Is that the only way you know how to communicate?, or is it just a lack of education or a feeling of superiority that when faced with something you do NOT understand you feel the need to lash out and debase the person that knows more than you do? Get him down to your level, so to speak.
I would seek professional help as that kind of approach to people is not going to bring you any positives. Then perhaps, you are a person that wallows in the negative, a pseudo-masochist perhaps?