|
|
|
Ask Tony
Saturday June 2 nd, 2007
by Tony Golan
Chief Technical Analyst
StockProfit.com™
Question:
Tony, why is ROCM taking such a beating? Your comments back in April and May on this stock related to your RSD indicating a strong uptrend and buy sure seemed on target given the second quarter earnings report. I am missing something here on this stock.
 Zoom
Tony answers:
Yes, all stocks look good when they're going up. It's how they look when they correct that determines whether or not the up-trend is more likely to continue or not. That means that if the stock is going down slowly and mildly after a sustained up-move, then the stock will be more likely to turn back up before going below the previous low and it will be more likely to continue to new highs.
On the other hand, if the stock goes down hard and fast when it finally starts to correct, then it will be much more difficult for the stock to rally again to new highs.
My comments in April were to place a protective sell-stop at 20.25. Once ROCM declined below 20.30, the up-trend was invalidated and was no longer.
To paraphrase Jesse Livermore, the subject of the book "Reminiscences of a Stock Operator", sometimes the reason why a stock goes up or down may not become known for a few days, or weeks, or months afterwards. But it doesn't matter. RSD is now below the 25% threshold, so ROCM will probably not cross my radar screen again unless it starts to go up again.
-Tony.
Enter your email address here to join Tony Golan's email list and be notified of new articles by Tony, upcoming technical analysis seminars and new products or services from Tony.
Tony Golan
Chief Technical Analyst
Disclaimer: All statements and expressions are the sole opinions of the editors and are subject to change without notice. A profile, description, or other mention of a company is neither an offer nor solicitation to buy or sell any securities mentioned. While we believe all sources of information to be factual and reliable, in no way do we represent or guarantee the accuracy thereof, nor the statements made herein. In no event shall StockProfit and/or its publisher, Pan American Relations, Inc. or any of its employees or affiliates, be liable for any direct, incidental, consequential, indirect or punitive damages whatsoever arising out of the use of the Information, or for any errors or omissions in the content thereof, including, but not limited to, from any investment loss, damage or expense incurred by any investor resulting from the Information, or from the purchase or sale of any profiled company or any company which we make commentary. We recommend using good-'till-cancelled stop orders to minimize losses in the event of an adverse price movement. We have not been compensated by company(ies) mentioned above in any way. We do not hold any positions whatsoever in the above mentioned company(ies).
|
|
