Stock Trading Basics to Swing Trading

[fill_the_gap]

If 1 cent base can hold, it may become a decent entry.
Such a yo-yo stock, a gradual increase would be nice.

Maybe some news about CC rollout beginning in May can come soon. 
Any news would be helpful. 

But after such a drastic retrace and Q already known, the downside is probably not much from here.

I will be adding some shares if it can hold up. 

[LiveLife]

fill_the_gap,

I am bought back at much lower levels, so I am still very comfortable.

What I think is happening with GZFX is many:

1)  I think many are still "unsure" and panic selling at the first sign of share price loss as seen yesterday and today.

2)  Many are jumping (perhaps daytrading) between GZFX and other stocks (STTK, VRDM, etc.) as such, their price gain/fall are inversely related going back a few weeks.  (If STTK, VRDM gains, GZFX falls and vise versa)

3)  I think many sold before the 10Q report, which I anticipated to be "nothing new or extraordinary" so I chose to hold through 10Q reporting.

4)  There's "let's wait and see" sentiment among many traders who traded GZFX before and lost money.

If you are thinking about trading GZFX again, I recommend that you wait for more confidence building on this stock.  I am bought in at lower levels so I can afford to "wait and see" with a smile.  If GZFX can't rebound, then I will sell above my buy price.

My sentiment is that GZFX will "struggle" some more before the passage of time/bad feelings will pass.  Technically, GZFX is due for a rebound and I am trading GZFX only based on indicators, to sell on the next MACD/RSI peak - it's all about being on the right side of the trade and making money.

As always, time will tell.   

[fill_the_gap]

Nice post.

I did not like the action yesterday at all.

Will remain on the sidelines and watch the chart trading off of MA and support.

Of course, news can come at any time.  But not sure what can really move it at this time.

[fill_the_gap]

You know I have been a GZFX advocate for over a year now.  But the 10Q was an eye opener for those wanting to make any money on GZFX.
It seems all the eggs are in the basket for Circuit City.  Very dangerous.  What if CC cancels? What if rental become unpopular?   And if you run the numbers, CC will not help them much in 2006 considering the Net Loss figures going up much faster than revenue.  So how far out can it go before VOD sets in.  And do not tell me that GZFX VOD is going to be a player.  A waste of money.
Problem is that they pay alot per subscriber to CC.  This is not very profitable to GFZX unless a sub is maintained for several months.  Any churn further hurts the Net Loss.

After reading the Q, it is obvious that GZFX has major issues.  Worse than most ever realized.
They maxed out Authorized Shares and added 25 billion total to pull from if they want.  That is never good to see happen, especially when the CEO said no more dilution was happening and then slapped 2 billion more shares on the previous Q.  Who knows when they will stop selling shares for cash and GG converting.
The lower the PPS, the harder it will be to move up.  The GG conversion schedule is brutal for shareholders.

Net Loss went up 135 % to 1.5 million dollars !  Net is the bottom line.  Increasing revenue does very little if Net Loss increases more.
Subs are the revenue source.  They only averaged 666 subs over the last 3 months when expecting 1500-2500 as stated in the last Q.
Circuit City pilot program did not produce many subs.  GZFX has also stated that CC will account for very little in 2006 as they ramp up.
With Golden Gate debentures and GZFX selling shares to get cash, this is only a play on news.

But with the big CC news come and gone, who knows when anything substantial will come.  Until then, trading the chart is the only way.  Those waiting for a big payday here, good luck.
So many people fell in love with GZFX on the CC story.  Time to take off the blindfold.  Emotional trading never has helped anyone.  This is why investing in an OTC is not often done.  The same pattern occurs, hype, dilution, hype, reverse split, more dilution.   Ask yourselves who is making all the money here. 

The financials were much worse than expected.       Maybe a trade on news off of moving averages if possible.  Nothing more.  Too many other stocks to make money on.

[LiveLife]

There was a question whether penny stocks should be covered on this Swing Trading MB.

I normally don't cover penny stocks, only listed stocks (NYSE, Nasdaq, AMEX) with high daily volume of 1+ million.

GZFX has been the only exception since November of 2005 due to the nationwide rollout with Circuit City.  Since last year, there was a lot of anticipation for growth for this tiny startup company.

I am asked by many in my newbies group if they should monitor/track and trade penny stocks.

My immediate answer is to stay with the listed stocks, but I want to mention one of many penny stocks I have traded since last year [Yes, not all of stocks I trade (listed and penny) are covered on the Swing Trading MB because it would be too much amount of posting]  .

Take a look at a penny stock ZENX.OB below (I did a simple BUY/SELL chart based on RSI only this time).  I got interested in ZENX last year during the hurricane season.  Zenex is a commercial roofing company with national list of clients.  After the hurricane damage, in September of 2005, they were awarded contracts by the US Army Corp of Engineers to provide blue temporary roofs.

As you can see from the chart, with no further contracts, share price of ZENX started to drop by mid-September.  Sentiment for the stock ran low and price dropped from $1.20 to $0.50 by January 2006 (Remember the $6 to $3.50 drop by NVAX?).

I never walk away from a stock fully.  Once I finish a trade, I place the stock in my "past stocks" folder on Scottrade (I have over 10 "past stocks" folders with 20 stocks each) and monitor them from time to time.

As with NVAX rebounding from $3.50 to $8, ZENX rebounded from $0.50 to $1.90 (almost 400% gain!).

GZFX is back at the level I bought and the sentiment is low.  I will apply what I have learned with other stocks and will continue to Swing Trade.  Will GZFX go lower?  Will GZFX rebound like NVAX and ZENX?

I am not a fortune teller, just a newbie Swing Trader applying what I have learned. 

Yes fill_the_gap, there are many other stocks that are actively gaining that we can trade to profit right now.

I have learned to not "fall in love" with a company like NVAX.  I have also learned to keep stock trading.

As always, time will tell.   

Take care everyone and keep on Swing Trading!

[joet]

Thanx for the posts John,
So are you in or out of GZFX now....  I will be holding for another month, Just 200,000 shares avg at .012, have a sell limit order at .02, will see if i get lucky while away from the computer for a month.  Ceers Joe

[tokyoseminole]

You know I have been a GZFX advocate for over a year now.  But the 10Q was an eye opener for those wanting to make any money on GZFX.
It seems all the eggs are in the basket for Circuit City.  Very dangerous.  What if CC cancels? What if rental become unpopular?   And if you run the numbers, CC will not help them much in 2006 considering the Net Loss figures going up much faster than revenue.  So how far out can it go before VOD sets in.  And do not tell me that GZFX VOD is going to be a player.  A waste of money.
Problem is that they pay alot per subscriber to CC.  This is not very profitable to GFZX unless a sub is maintained for several months.  Any churn further hurts the Net Loss.

After reading the Q, it is obvious that GZFX has major issues.  Worse than most ever realized.
They maxed out Authorized Shares and added 25 billion total to pull from if they want.  That is never good to see happen, especially when the CEO said no more dilution was happening and then slapped 2 billion more shares on the previous Q.  Who knows when they will stop selling shares for cash and GG converting.
The lower the PPS, the harder it will be to move up.  The GG conversion schedule is brutal for shareholders.

Net Loss went up 135 % to 1.5 million dollars !  Net is the bottom line.  Increasing revenue does very little if Net Loss increases more.
Subs are the revenue source.  They only averaged 666 subs over the last 3 months when expecting 1500-2500 as stated in the last Q.
Circuit City pilot program did not produce many subs.  GZFX has also stated that CC will account for very little in 2006 as they ramp up.
With Golden Gate debentures and GZFX selling shares to get cash, this is only a play on news.

But with the big CC news come and gone, who knows when anything substantial will come.  Until then, trading the chart is the only way.  Those waiting for a big payday here, good luck.
So many people fell in love with GZFX on the CC story.  Time to take off the blindfold.  Emotional trading never has helped anyone.  This is why investing in an OTC is not often done.  The same pattern occurs, hype, dilution, hype, reverse split, more dilution.   Ask yourselves who is making all the money here. 

The financials were much worse than expected.       Maybe a trade on news off of moving averages if possible.  Nothing more.  Too many other stocks to make money on.

good points but I think you need to remember that the roll out does not really start till May 1st.. I think the next Q should be the one that tells us if this company is in big trouble.

[LiveLife]

joet, tokyoseminole,

I am still holding GZFX.  The share price is almost down to my buy price of April 19th, but I will give GZFX a few more days to rebound.

If GZFX won't rebound, I will sell.  If GZFX does rebound from current levels, I will trade based on technicals.

[LiveLife]

Up 5.49% today.  I will continue to trade GZFX based on technicals.

[LiveLife]

FYI

[LiveLife]

Technically, if GZFX continues to rebound, will it follow the trendline?

[LiveLife]

I got some heat for covering GZFX, a penny stock, on the Swing Trading MB.  There was much discussion this weekend with the second newbies group and this is what I decided.

If you look at penny stocks such as ZENX and USXP, the gain potential is definitely there that can be tracked technically.  Of course, if you were able to track the BUY/SELL patterns, your gain potential easily hit 100% - 600%+.

However, since this is a Swing Trading MB thread for "newbies to Swing Trading," I have decided to not cover penny stocks.  I will certainly continue trading penny stocks due to their gain potential, but the volatility associated with penny stocks make them less desirable for stock traders new to learning the technicals who can't always respond to fast selloffs.

As such, I will continue to apply the Swing Trading principles for listed stocks (NYSE, Nasdaq, AMEX) with daily volume of 1+ million.  I will resume the BUY/SELL coverage of recently traded stocks.

BTW, I am still holding GZFX and will continue to trade according to technicals.  If price drops close to my April 19th buy price, I will sell.  If it continues up, I will hold.

[LiveLife]

= Rotational Swing Trading Update =

Following are stocks previously traded with recycling of BUY/SELL patterns.

As you can see from the BUY/SELL charts drawn based on MACD bottoms and peaks, corresponding RSI BUY points are not exactly on the mark with MACD bottoms but the RSI SELL points (70-90) are right on the mark with MACD peaks.

Many stock traders have commented in the past that their main problem is not knowing when to buy, but knowing when to sell.  If you follow the RSI rise to 70-80+ after the buy, then determining the sell point should be fairly straight forward.  As a precaution, I usually look out for profit taking activity as RSI reaches previous profit taking points, whether it is 70-80+ or early as RSI hits 60-70+.

Also, after you take profit and wait for the rebound, watching the MACD bottom will help you determine the "true" rebounding activity instead of just following the price.  Using MACD to determine the buy point will allow you to get back in at just about the bottom.  In the past, I have tried to use the price to determine the bottom, but have been "faked" too many times.  I now use MACD bottom as the confirming indicator for stock rebounding.

As you can see from the BUY/SELL charts, stock rebound can often take several days to weeks.  And for this reason, having a list of stocks you are familiar with to do "Rotational Swing Trading" will minimize idle or down-time with your stock trading capital.

[LiveLife]

VICL news!

http://finance.yahoo.com/q/h?s=VICL

Vical's DNA Vaccine Provides Complete Protection Against Avian Influenza and Demonstrates Cross-protection Against Multiple Human Flu Strains in Animal Studies
Tuesday May 2, 7:25 am ET

SAN DIEGO, May 2 /PRNewswire-FirstCall/ -- Vical Incorporated (Nasdaq: VICL - News) announced today that the company's lead three-component influenza (flu) DNA vaccine candidate provided 100% protection in mice and ferrets against lethal challenges with a highly virulent (Vietnam/1203/2004) H5N1 avian influenza virus in studies conducted by Richard J. Webby, Ph.D., at St. Jude Children's Research Hospital.

= Update =
VICL gapped up at market open 30%+.  If there is a drop, may be a good entry point.  If you look at the 3 year chart, VICL is almost at 3 year high.  Will it go much higher?

This news will certainly put a damper on many Avian stocks, at least short-term.

= Update =
With such a large gap up, VICL looks to drop intraday.  As anticipated, many Avian stocks are in the red this morning.

[LiveLife]

GNBT is one of first Avian plays to go green.  Perhaps their primary product line of Oral-lyn and buccal delivery system may fare well in regards to share price as their Avian vaccine development is a secondary pipeline.