A Trade A Day

I love to analyze and research, and I like to help others. Here is a stock pick from theirry, a frequent commenter: “Have a look at FRO i would like to know if this fit your methodology ( that you have to explain ) thank you, thierry”.

So Thierry, here’s my analysis:

FRO had some decent looking setups the base on base would have worked out well, but I probably wouldn’t have taken the trade. The reason is the amount of overhead resistance. Typically the 50 and 200 day SMA will provide significant overhead resistance. Now, taking a look at FRO, the stock blew through the 50 and 200 day SMA’s, so Theirry, you would have made some points on this one. I personally would have looked for a trade with less risk. I try to have the moving averages underneath the price if I am going long and above the price if I am going short.

I guess the “bad” thing about the way I pick trades is that I will rarely get in at the beginning of a move. I almost always am picking up a few points off retracements. TIVO is a winner that is atypical of the trades I look for. Now that it’s probing its 200 day SMA, I’ve taken some profits because of the likelihood that it will bounce off the 200 day SMA. It was a higher risk trade because of it’s position relative to it’s moving average just like FRO.

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