1 Winner, 1 Loser
August 23rd, 2005 by BWV
At $33 now, we’re up about 7% on this recent entry into HUBG.. Avg entry was around $31 flat. The top chart shows the conditions when I bought.. a monthlong consolidation of the huge up day when earnings were released. I was betting that the low that had held for a few days, right around the 20 day moving avg, would turn out to be the first higher low as HUBG resumed its uptrend.
The numbers to the left are called Fibonnacci figures.. they are derived from occurences in nature/biology.. but I use them simply because 1. other traders use them, occasionally making them self-fulfilling, and 2. they are an objective, logical way to measure the depth of a pullback. HUBG retraced 61% — the final line in the sand Fib-wise — of its big 1-day rally.. almost to the penny.
A break below those lows near $30 would negate my hypothesis. But so far, I’m correct, to the tune of a 2-1 reward to risk ratio.. I’m up $2, having risked only $1. But I think this thing has a lot of room to run.. considering the magnitude of that massive earnings-related rally. Today’s chart is below.
They all can’t be winners:
I got a low-risk long entry into KWK, an Oil stock, near the bottom of this channel.. and at the 50 day moving avg, an area where many institutional investors tend to buy. They did not step up this time however, and in fact sold this sucker down hard. I took about a $2 loss on this guy, and it’s still headed down, having hit $38.25 last week.
