3SOF

Ok, If you look at the stock COI, you can see that it has fallen dramatically. The way I see it is that it has no where to go but up, right? So wouldn't someone take a position in it? Or am I just totally wrong on my theory? When stocks go down like this, do they go back up?

I haven't been trading for long so I hope someone with more experience will reply.
However, this is what has happened in my short experience.
I thought the same about these stocks and wanted to throw a little money at them just to test the theory. So, recently I bought these stocks after their big drops.

http://stockcharts.com/gallery/?GRVY

http://stockcharts.com/gallery/?RTIX

http://stockcharts.com/gallery/?PRVD

http://stockcharts.com/gallery/?MATK

http://stockcharts.com/gallery/?GSOL

http://stockcharts.com/gallery/?ATEA

http://stockcharts.com/gallery/?BCGI

http://stockcharts.com/gallery/?UTSI

http://stockcharts.com/gallery/?MAG

I sold all except 2 for profits.
I am still holding UTSI to see if it will go up any more.
I am still waiting for MAG. Who knows?
Anyway, I don't know if this is normally what happens or if I was just lucky.
I also would like to know.

But be sure the company is not about to die. Maybe the stock went down for a good reason.

Anyway, good luck!

J.B. - What I have learned is that nothing is a sure thing in the market.  Do historical analysis of this pattern.  Look at many charts.  And when you see the same thing occur...do not go crazy with your whole portfolio.  Look at ELN.  Some people thought it was cheap after its initial fall.

J. B.,

Even though I had good luck with the trades that I posted, as eliteG pointed out sometimes they go up and sometimes they just keep going down.

And I'm still not convinced enough to put much money into such a strategy but I will still look into these trades in the future.

In the trades I posted, I only put about 2 % of my money in each one so I didn't worry about what would happen to them. As a result my profits were also small but I feel I learned something and that is what I was after more than the profits.

By the way, if you are interested, take a look at Friday MAG.


http://stockcharts.com/gallery/?MAG

All that gain occurred in the last 20 minutes or so of the day.

I hope that means what I hope it means.
But if not I will wait some more.

Hum...

Experience told me not to try to catch up a falling knife...
You need a buy signal, some kind of power reversall clue... The stock being totally oversold on a short period, by itself its not a signal. This way, I never try to catch the low price, I rather buy with some upside price action and a lot of volume, and I never guess the bottom line (buying the lowest low, and selling the highest high it's not for me ).

Like EliteG said, look at many charts.

J.B.,

This chart looks bitter. Technically, until beginning of June it looked like a huge round bottom, which is positive. But then this free fall is horrible!  This only happens when serious fundamentals come in to play.
In this case forget any chart pattern. The stock is helpless depend on the stories and the case behind. I have not researched this stock, but same as Ramsburg, the chart lets me shying away.  Little chance – endless risk.

Ossan,

Concerning UTSI
As per chart, UTSI makes a second bottom. That looks positiv as long the new low is higher than the previous low. The MCAD crossover is higher (not in your chart) -> positiv divergence.
The stock has a short ratio of 5.68 (days to cover). That is a medium value and therefore somehow positive. Higher values giving the chance of a shortsqueeze but bearing also the risk that the short sellers are right.
And, fundamentally there is some trouble. UTSI announced a restructuring program which will create a ~-0.70 EPS loss next quarter. (that was the reason the stock plunged on 05/05 even in the face of a good 0.28 EPS) So, all is related to the restructuring progress. In case in the beginning of August will be a better than expected restructuring process reported, than there will be a chance for a turnaround.
Otherwise it will continue the usual way.

andyman

concerning MAG:

Interesting play on the substantial side. The oil price blows off the roofs  – and clears the way for the alternative energy companies.

The chart looks not bad. 2$ seems to be a rock solid bottom. Chart technically, the MA50 is coming close that sometime encourages the speculative players for a test. If the fundamentals do not spoil the soup.   
But there seems no danger. They could be improve Rev's as the sale of power switchgear usually ups in summer (especially the alternative energy installations) and high demand in MAG's alternative energy products have been already reported.
But why this plunge in May? Simple, there was a already forgotten and ignored patent conflict where the final decision was 24.6 Mio for the plaintiff.  And earnings has been quickly revised according to the situation, a sign that the company want to clear quickly their past and maybe a sign that there will be a more promising future, so they do not waste their time in fighting and lookong back.   
A punch through the 60$ pbl oil is probably motivating players to believe that MAG's alternative energy product line can quickly compensate that damage.

Depend on oil price next week. With oil price >60$ pbl this can move quickly back in to the 3$ area.
Than, interesting stock for an retirement portfolio! Long term potential on alternative energy fantasy with attractive entry level (thanks to an lousy patent fight).

andyman

andyman,

Thanks for your input.
I already got stopped out of UTSI when it started falling from the recent peak a week or so ago.

I couldn't answer specific questions for J. B. about COI. All I could offer was what my experience had shown me so far. But I think he got his answer from everybody else.

Of the stocks that I posted, I now hold only MAG.
I will proceed with caution.