" I don't think they get scared off of good valuation stocks when games are being played....I think the fund managers know about these games and are not scared off as easily as you think...."
You've used the word "scared" twice. I'm sorry that you've misinterpreted something in my posts which inferred that was what I was saying! Not so.
I don't think that many [any] portfolio mgrs get intimidated or scared or coerced...in or out of positions. The reason[s] I say that are posted in my recent posts here.
Ever read Peter Lynch's book, "One Up on Wall Street". Great read about how the retail investor has a leg up on Wall Street on many occasions.
I'll elucidate my main point once again...
When many portfolio mgrs get a 20% return on their investment, they will usually take it....no excuses, no alibis and certainly---no procrastination.
If they feel the stock has more to run, they will liquidate part of the position and retain some percentage of their holdings in that stock. If those remaining shares do well, the same procedure is repeated.
However, if the stock falters and goes below the previously agreed-upon price, they sell.
I have 1K shares of MXL, which I have purchased on the dips, since October. I'm not at all denigrating MXL! I was merely stating what many institutional investors do...
"When they are worried like they are about tech, they sell everything, especially the high fliers. "
Why wouldn't you?
In a market like this, if you were a manager of a mutual fund, or another institution, with hundreds of thousands invested in MXL and you were UP 20%...would you hold your MXL or would you sell?
If you were an institutional investor, you bet you'd sell...if you wanted to keep your job as a portfolio manager...you'd sell.
Us retail folks seem to see the market gyrations differently, for some reason. We always hold out, hope-for-hope. I'm guilty just like the rest of us...
Personally, I think that waaay too much emphasis is being put on IBD and their ratings here, as well as how their ratings affect a stock. See my earlier post.
If you are an IBD subscriber like I am [almost 28 years now] and you keep your own stock "watch lists" on the IBD website, how often do you review your lists and the stocks therein?? I check mine every weekend.
Have you ever noticed how many on your list will occasionally rise on terrible IBD indicators: a stock that breaks out or breaks down and acts contrary to the IBD ratings?? There are other criteria that other retail investors, and particularly institutional investors, use to buy and sell stocks in their portfolios!
Not everyone who owns MXL ties their motivation to the vicissitudes of IBD's Stock Check!
Don't get me wrong, those ratings go far to help winnow out the poor performers, but even Bill O'Neil himself has admitted that occasionally he'll notice that some stocks break out on terrible technicals, or just average IBD indicators...everything being equal.
Read his book..."How To Make Money In Stocks"
If you look at a weekly OR a chart---notice the December 3, March 2 and April 13 highs and the February 9, March 24 and April 22nd lows.
Connect the tops and the lows with a straight line.
You'll discover that they intersect at or near the $19.00 value. Conventional technical analysis going back over 100 years tells us that when/should NUAN reach that target price, it will either "break" above or below that point.
By "break" I don't mean meander either way; history tells us that more often than not it will break out...or beaks down. If you are an I.B.D. subscriber, you'll notice that NUAN's acc/dis for the past 13 weeks is a miserable and very bearish "D-".
The shorter term 'up vs down" volume indicator remains at a very bullish "1.3"...thus the quandary!
My dad was a baseball fan; used to listen to the Brooklyn Dodgers on the radio. The Hall of Fame announcer, "Red" Barber, used to say [and this is quite apropos for NUAN,], "...three and two---what'll he do?"
Walk or strike out?
Even though MXL is a thinly traded stock, you've got to remember that the retail investor is responsible for about 30% of a stocks move...the rest is institutionallying generated.Trading therefore is exacerbated with and by the 1 million or so daily volume M/A.
My point is that you can't place a lot of the blame for MXL's trading completely at the doorstep of IBD readers and followers of O'Neil's 8% rule...
There are a lot of other trading strategies in this mix, let's be assured of that.
...but pig, why would CI sell, if , as you say your convinced, that something "in the wind" will inevitably drive this stock higher?
NUAN's trend is still up, the last 2 days notwithstanding. The recent up and down trading is biased w/volume to the upside. So, unless I miss my guess I'd say hat a snap back to the 50 day M/A should soon occur for the reasons stated in an earlier post.
If I had more ca$h, I too would add to my 2K holdings, buying the dips, pig...
Actually I am still here, pig...patiently awaiting earnings. IBD's "earnings upgrade" is in the green, so according to their proprietary information, this is a positive. Note too that the chart is showing a gradual rising of stock price...week-over-week. Not above normal volume, but positive uptrend for the past 3 weeks. There is quite a positive acc/discuss indicator at "1.4".
Fund ownership is up 1% (IBD), so there is some reason for some optimism
So I am awaiting a positive response to earnings and I look forward to once...just once hearing a hint of a positive forward guidance. That would be a tremendous boost to the long suffering longs on this board.
"From your mouth to God's ear", as my beloved parents would say!
...remember too, general that when a preannouncement is favorable, more often than not, all "boats" are lifted by that tide.
IBD has a stock "check list" on which it rates MXL a "99"... The highest rating a stock can achieve, but...
The number of quarters of fund ownership is 0, as is the % change in ffund ownership quarter-over-quarter. The up vs down volume indicator is a bullish 1.5: the 13 week ACC/dis indicator is bullish B-.
Today's volume change of 18% above normal doesn't say much because MXL has, many times shown itself to run contrary to market direction.
Lastly, MXL is bumping up against a " double top" or a triple top chart formation, depending on just how fine a point you care to put on the price action...
Thank you, Vandy! I'm going to save your post for every time I read a post on calls! Is there a website or book you'd care to recommend for basic beginners like me?
Can you please explain the potential impact [up OR down] on NUAN, that your post implies...for someone like me who does not understand options?
"Nuance Communications NUAN , which develops speech-recognition software, is working on a new base amid accelerating profit growth.
The stock is shaping a cup-type base with a potential buy point at 21.92. However, a pullback occurring this week could create a handle that would provide a lower buy point.
Nuance has posted four straight quarters of accelerating profit growth, including a better-than-expected 44% increase in the latest quarter to 36 cents a share. But sales growth has been tepid, ranging from flat to 3% over the quarters.
Weak sales growth means that the company has had to boost profit margins to sustain its earnings growth. Annual pretax margin rose to 22.3% in the fiscal year that ended in September, up from 19.6% the prior year, thanks to cost-cutting initiatives such as job cuts and expense reductions. The company is also trimming debt used to finance a spate of acquisitions in recent years.
Nuance is a leader in software used in mobile devices, call centers and the health care industry. Nuance “should benefit from the company’s market-leading position and nascent opportunity in speech solutions,” analysts at Oppenheimer said in a Feb. 10 research note, which rated the stock as outperform.
However, the software sector is lagging at No. 29 out of the 33 sector groups tracked by IBD, as of Wednesday.
Nuance’s latest pattern formed after the stock rose 14% past a 19.06 buy point of a 14-week consolidation and then corrected. The bottom of the current base shows a bullish upside reversal in heavy trade as the stock bounced off its low.
Nuance’s Accumulation/Distribution Rating of A- indicates strong demand for the shares, and the relative strength line is near a new high, a bullish sign. The Primecap Odyssey Aggressive Growth Fund POAGX , rated A+ by IBD, has been a shareholder since at least 2009."
Since the low of February 8th [$12.67]. MXL has gone up 30.3% without taking a breath, of any duration, in those 21 trading days. By any accounting, that's pretty formidable return for a 21 day investment, don't you think?
So, If you were an institutional investor and had somehow, through the grace of God, bought MXL right at the February 8th low, would you not consider it a good, prudent practice to sell some/much/all of your holdings and bank your 30% gain, particularly in a market, like we are experiencing currently, with a bad case of the heeby-geeby's?
That what concerns me and should concern others; I've got two other stocks that have had the same "V" bottom bounce in which I have lightened my position.
Not a day has gone by that I.B.D. has not had some article or snip, extolling the stock.
Just about every technical indicator in I.B.D's. Stock Checklist is positive...yet I'm still concerned. March 4th's action is the brunt of the concern. Let's look at a chart...
Since February 26th, MXL's volume has closed above the 50 day average with blow-off volume on March 4th. I'll not reiterate my previous post on this point. Suffice it to say the chart action, in a market like this, is extraordinary and cannot be sustained---or supported for much longer, I feel..
We're all ecstatic about the leaps in pps from the $16.15 low of February 9th. Yet a thing or two to keep in mind.
1) Look back to a chart and notice that the July 17, November 3, December 2 and December 29 attempts at NASDAQ new high were all turned away on the above dates...all on average or lower than average upside volume
2) The last two dates also turned NUAN back, while attempting new highs...
All the talking heads are forecasting a return to the previous lows of early February. Too, they were all so certain that the 1950 spot on the S&P was going to spell doom.
I only mention the above as a reminder that the majority in anything, i.e., "herd mentality" is almost always wrong...but the technical's seldom are...
"Shares of MaxLinear MXL jumped to a new high Friday, but gave back most of their gain by the close of trade.
MaxLinear was up as much as 6.5% before ending with a gain of 0.35, or 2%, to 17.51. Volume was heavy.
The maker of broadband and wireless communications equipment cleared a 14-week consolidation. But the stock had already broken out past the 16.29 buy point of a double-bottom base."
This "giving back" much of its daily gains is becoming very suspect. Back on November 30th and December 1st, when MXL made new highs, it was summarily trounced to ultimately close in the high $13's just 2 months later...
Be very careful with your hard-earned capital!
"Video display chip firm MaxLinear is one of the few stocks recently making the stringent Sector Leaders screen. The stock is finishing a consolidation with a 17.85 buy point. Technically it is a third-stage base, but the stock hasn’t seen the outsized gains that usually accompany late-stage base failures."
"MaxLinear has a more attractive up/down volume ratio of 1.1 and boasts triple-digit EPS growth in the last two quarters. Larger numbers are easier to come by when starting from a smaller base of profit, but the strong growth is hard to ignore."
"Yes, but you may be on the sidelines with cash..."
If you were addressing my post, let me assure you that I have held 10% in ca$h for several years...fully invested in NUAN since January, 2012. Just read my previous NUAN posts since then.
"The majority of lagging performance portfolio managers will be on the sidelines with you wringing hands and waiting for a pullback to get in."
I believe a pullback in here somewhere is in order, that's true. However, if it doesn't occur, being 90% invested, I'm happy regardless! NUAN isn't my only stock investment...
In almost 30 years of investing, I usually miss the top 10% of a market move by selling too early, as well as missing the 10% bounce off the bottom of a market correction, by waiting for an uptrend to confirm...but seldom have I ever missed the 80% in the middle.
This current market is no exception...