3SOF

Quote from: ScottishTrader on November 11, 2006, 05:17:21 PM
Basically, every trade needs to be treated like you are new to a stock. No history

Scotsman,

I totally agree.  I "like" DNDN, so I stayed in that trade from May to September, knowing that I had plenty of short-term sell signals.  "Treat it like a business."

This is the 13/21 RSIs chart.  That's the fastest that I use, for "early" indications.

You can see all off the failures at Bearish Synchronicty (readings are very close), until the nice Buy Signal, at 7.63.

This indicator has had a Double Top, then a failure at the Double Top, and at Bearish Synchronicity.  It gave a Sell Signal on Friday at 8.89, a penny below the November 7 low of 8.90 (the sell pivot), which was the day that the signal was issued.

Next, we'll skip down in the Fibonacci sequence, and look at the 34/55RSIs, then we'll look at the recent chart after that.

34/55RSI Chart.

Nice Buy Signals at both the W-Bottom breakout, and at the Bullish Inverse H&S breakout, on October 23.  The low that day was 8.90, so that's the Sell Pivot.  A print of 8.89 is the stop.

So, we've got TWO stop outs at 8.89, arriving at it from two different indicator time-frames, and from two different days: October 23, and November 7, on the 13/21RSIs.

These 3 recent red arrows (failures) are suggesting that the Inverse H&S was a false breakout.

As you know, indicators don't TELL US to sell.  We make that decision, by considering the signal vis a vis what's going on in the chart.

We'll do that next.  Probably in the morning.

Scotsman,

My boys (Notre Dame) are winning by 30 points, so we can carry on.    

If today were after the October 26 close, I would be be saying...

Scores For Technical Merit...




  10...10...10...10...10...10...10...


1. The Inverse H&S Pattern had broken out.

2. The W-Bottom target of 10.31 MADE that day.

3. Your Wolfe Wave target of 10.33 MADE that day (you did a great job, finding that!)

BEAUTIFUL.

The candle that day isn't great, but DIVX recently put in a much worse candle off resistance, then continued higher.  At this point, that candle wouldn't bother me, and I would "assume" that the Inverse H&S target of 13.01 would get MADE.

"Assume that it's still Bullish...until it ain't."

Let's see what happened.  Next post.

Quote from: Melf Elf on November 11, 2006, 06:13:36 PM
"Assume that it's still Bullish...until it ain't."

Let's see what happened.  Next post.

DREADFUL!!!!

1. We never like to see a close, back below a breakout, but we got one the next day.  Well, okay.  Sometimes that happens, but we would expect a quick recovery.

2. October 30, a Black Candle, closing near its low.  Wha-aat?? 

3. Halloween, a recovery.  Whew!  You had me worried there! 

4. November 1, a little black candle.  What's the problem here?     

5. Novermber 2, a break a CLOSE below the 8.90 October 23 RSI "Buy Pivot" Candle!  Please tell me that you're joking!  I'm STOPPED OUT. 

6. November 3, a white candle.  Well, of course!   I just got STOPPED OUT!!   

7. November 6, a "Gap To Crap" candle on BIG volume, at the neckline of the Inverse H&S, and another close below the 8.90 "buy pivot."  The close was 8.85.


Scores For Technical Merit...


Please wait...


The judges are furious...




1...2...1...2...2...0...



The last judge is Melf Elf, who is ver-ry cranky.

8. November 7, A nice white cancle, that fails at the neckline. 

9. November 8, I don't care any more. 

10.  November 9, I said I DON'T CARE ANYMORE!!!!

11. November 10, another break of 8.90, so another Sell Signal, basis the RSIs.  But, it managed a close at 8.94.

I don't care.  I HATE THIS STOCK!!!!!!!!!!   

Warning:

"Do NOT become emotional about stocks, like Melf Elf.  He's much too cranky." 

We will look at UNEMOTIONAL Bullish Possibilities in the next post. 

One of the best chances that OMNI has of returning to Bullishness, is to put in something like the Bullish Falling Wedge that we discussed, then break out again.

The top of the Kumo (Cloud) is at 8.72, so a low there, then a breakout would be a Symmetrical Triangle.  More like a Descending triangle, since the last low was 8.70.  If it dips below that, then breaks out, its the Bullish Fallling Wedge.

All of the RSIs are bearish, like the 'RSI Across The Board Sell Signal" in GIGM, at 11.00.  GIGM droppred to 9.09 on that signal, before recovering.

So, OMNI has its work cut out, rallying against those signals.

We know the "Coulda...Shoulda...Wouldas" that we do, after a trade.

Try to do that NOW.

What do you KNOW that the stock is doing?  LIke:

1. It just broke down from the Double Top, at 9.29, so I'm shorting.

2. It just broke down from the Bear Flag (early September) so I'm adding to my short.

3. It just broke out above a W-Bottom, so I'm getting long.

4. RSI gave a Buy Signal, and the chart looks good.  I'm getting long.

5. The Inverse H&S broke out.  I'm getting long.

When we don't understand what's going on, nothing wrong with "abandoning the trade."

"When in doubt, get out."

I never recommend.  It's your money, Scotsman.  YOUR decision.  Sorry that these posts were so long, but I like to understand trades, as best I can, and it takes a lot of work and thought, like you've been doing, which is why I spent the time.  I greatly admire your efforts.

Good luck, buddy!

Melf,

Thanks once again (and applauds!!!) for your insightful analysis.  Your RSI synchronies are not something I use, but have become somewhat au-fait with, having followed many of your other threads elsewhere.  My perception of the recent action is probably much in agreement with yours.  I do see some potential support (light blue line) right around 8.90 on the hourly chart, which OMNI was flirting with on Friday.  I think, given all of this, and the fact that OMNI seems to "want" to go lower in the short term(at least all the indicators are pointing that way), the most prudent course of action would be to bring my stop up to my buy point, at 8.86, to limit any loss, and I don't want to see a profit turn into a loss here.  If 8.90 support holds, and price breaks out of the short term descending channel (pink) to get a rally on Monday, I may aim to sell close to 9.50 (if it gets that high). I think that our descending wedge pattern may have some validity, so if I do get out here, I may look for a buy around that 8.47 W bottom support, if it looks like it will hold.

So the lesson of this trade (and there always has to be a lesson, otherwise we aren't learning, right?) is to plan the trade and TRADE THE PLAN.  Take profits (at least partial) when targets get MADE.  Looking back at my original analysis when I bought at the beginning of the week, it was bang on.  I was looking for 8.80 support to hold on the gap to crap sell-off, and for the price to make a short term reversal.  I was looking for a rally to test resistance at 9.80.  OMNI bottomed at 8.78 on the sell-off (my buy was at 8.86).  The next day OMNI rallied to a high of 9.78, giving a very healhy 10% 1-day return.  As a short term trade I *should have* entered a limit sell near my target when I entered the trade (or at least the next day when it was rallying).  Instead I did nothing and have been watching the price action reactively since.  It really is as important in trading to know when to sell as it is to know when to buy (often even more important!!)  I know I need to work on this.  So if I get out of this trade with a break-even and a lesson learned, I won't be too disappointed.

Again, Melf, thanks for your help on this one, being able to discuss trading situations such as this and get clear honest insights is indeed what makes this community great.

Scotsman

Quote from: ScottishTrader on November 12, 2006, 11:47:01 AM
So the lesson of this trade (and there always has to be a lesson, otherwise we aren't learning, right?)

Scotsman,

Right! 

Quote
I know I need to work on this.  So if I get out of this trade with a break-even and a lesson learned, I won't be too disappointed.

That's the important thing.  Take reasonable losses if you have to, or abandon a trade if that's appropriate.  Just don't get hurt too badly on any trade.  Have a plan, as you said, and if it isn't working, get out of the trade.

De-persoanlize trading, and view it as strictly a business decision.  "I'm not getting the performance that I expected for the risk that I am taking...I'm selling it."

Next!

Quote
Again, Melf, thanks for your help on this one, being able to discuss trading situations such as this and get clear honest insights is indeed what makes this community great.

You're more than welcome, Scotsman, and thank you for sharing your experiences so openly, and so honestly.  It isn't easy to do that "in public," and I admire you for it.  I totally agree with you about how helpful it is to have ongoing discussions in these folders with other members of the community.

Best of luck with this trade, and with all of your trades. 

 

sold OMNI @ 8.78.  looked to be moving down below support.  Loss on the trade - about 1%.  Of course OMNI is now printing 8.9 and may rally back to 9.5, who knows

hi there ! With OMNI don't forget that apart from trading you have to keep your eye on the movement of OIH and Crude Oil as well.

I am long for now but only for a quick pop

breaking out 

currently at $9.40

to me it looks like we won't get a bo on OMNI until it breaches 9.50, which it may do....

next week me thinks (hopes)

GLTA...Jody

Well there was our 9.50 breakout!!  Picked up some at 9.92, yesterday.  I'm just sure that's a nice inverse H&S formation.  The only thing I can't figure out is whether to use horizontal resistance at 9.81-84 as the neckline, or the ascending line as the neckline, which admittedly looks to be a better fit, i.e. with perfect tags, but then the right shoulder breqakout comes in around $11 right now.  The right shoulder is also quite a bit wider than the left one, I'm not sure whether that is of major significance.  Anyway, as I see it, despite some negative action today, OMNI held above $10 which bodes well.  Resistance @ 10.50, support comes in @ 9.87 and below that, 9.50 area.

Looks good so far...

OMNI looks set for a rebound, provided it can move into the gap sitting just above.  Way oversold, but indicators are all pointing up.  Oil services have been getting killed as oil has crashed through the floor, but as OMNI management have stated, their order backlog remains strong and they anticipate strong revenue and earnings growth though 07 as they continue to execute their growth through acquisition strategy.

I think this looks to be a good value play right here, and am long for a bit at $8.10

Well in case anyone is interested, OMNI had a nice day today, finally producing a nice white candle into the overhead gap.  There is still quite a bit of resistance to get through here, including 8.68-70 resistance, the bottom of that gap at 8.78, the 200MA at 8.72, the 9-9.10 base of November and december's trading, the 50SMA at 9.50, and finally horizontal resistance at 9.72.  But if it can beat tall that it'll be home free! 

But seriously folks, I think that OMNI has been way oversold and is actually a solid rebound play here.  Sure, oil has been in a tailspin, but there has been a lot of talk lately about "now's the time to get back into oil stocks while they're cheap.  Plus Schlumberger, which has just faced exactly the same downhill momentum in the last month, reported very strong revs and earnings on Friday, and said that they see the oil services sector as having very strong growth for at least the next decade.  I expect OMNI to echo this sentiment when they report.

http://yahoo.businessweek.com/investor/content/jan2007/pi20070119_421149.htm

The fact is that while oil may have come down, and fears of a global oil shortage are allayed in the short term, the oil companies are needing to spend more money on drilling, exploration and environmental services.  Oil services companies such as OMNI will continue to be in strong demand as oil companies source new reserves.  OMNI has also been expanding its environmental services division, with the acquisition of Charles Holston:

http://biz.yahoo.com/prnews/070122/dam024.html?.v=80

Which should add directly to the top and bottom line.  Quarterly earnings growth is accelerating, having earned .27 last Q, analysts are expecting .50 for the december quarter and 1.10 for the year.  That gives OMNI a P/E of 7.7, which seems pretty cheap to me, and they are anticipating 96M in revs for 06 and 150M in revs for 07, and this is for a company with a 133M market cap.  Compare that the industry average P/E of 17.6, and include the fact that OMNI is growing rapidly, and I think that this stock has serious value.

Anyway, I'm not too hot on the fundamental side of analysis, but this looks pretty good to me.