When has a stock run out of steam?

E

EMini-Player

Lately I'm having trouble getting into Long positions because I look at how far a stock price has moved from the previous close, and think the overall move has run out of steam and will reverse on me any second if I get in. For example, NVDA this morning. Everything was looking good, and I could have gotten in when NVDA was up 3 points but I couldn't do it. I felt like the stock had run out of steam and wouldn't go any higher. Hell, I even thought I should short it :eek: There are several other moves I've spotted but missed out on because of the thinking that a stock has moved up X amount and cannot go any higher. Maybe it's because I began trading in a bear market and am afraid to go Long on stocks that have already made big moves. Any advice from the pros?

Regards.
 
Quote from Fast_Trader:

Lately I'm having trouble getting into Long positions because I look at how far a stock price has moved from the previous close, and think the overall move has run out of steam and will reverse on me any second if I get in. For example, NVDA this morning. Everything was looking good, and I could have gotten in when NVDA was up 3 points but I couldn't do it. I felt like the stock had run out of steam and wouldn't go any higher. Hell, I even thought I should short it :eek: There are several other moves I've spotted but missed out on because of the thinking that a stock has moved up X amount and cannot go any higher. Maybe it's because I began trading in a bear market and am afraid to go Long on stocks that have already made big moves. Any advice from the pros?

Regards.
More...

you have just hit on the hardest part of the mo mo game. you really cant ever know for sure. its kind of a gut feel thing but if you are wrong it can be painful. instead of worrying about the rare mo mo stock that keeps going you are better off with setups that you can repeat every day. you will be better off in the long run.
 
Quote from Fast_Trader:

Lately I'm having trouble getting into Long positions because I look at how far a stock price has moved from the previous close, and think the overall move has run out of steam and will reverse on me any second if I get in. For example, NVDA this morning. Everything was looking good, and I could have gotten in when NVDA was up 3 points but I couldn't do it. I felt like the stock had run out of steam and wouldn't go any higher. Hell, I even thought I should short it :eek: There are several other moves I've spotted but missed out on because of the thinking that a stock has moved up X amount and cannot go any higher. Maybe it's because I began trading in a bear market and am afraid to go Long on stocks that have already made big moves. Any advice from the pros?

Regards.
More...
I experience the same thing, in fact I got into NVDA myself after hours yesterday at 17.32; it had closed at 16.06. I took my profits at the first sign of a stall shortly after the open at 18.84 and then watched it go up and up etc. Later in the day I saw a story on Briefing.com that NVDA had a large % of short interest and because of the very positive upward guidance by NVDA, the shorts were covering fast and furious. I did get back in in the last hour after doing a lot of watching and seeing some big prints coming across. Got back in at 20.62 surprised it easily blew past 20. Was prepared to sell around 21 thinking it's not going over 21. Wrong, I then got out near the close at 21.32. On this one the buying and selling was very orderly both up and down because of the huge volume which helps prevent getting smacked around in big moves up or down. Like I said I learn a lot just by watching and getting a feel for the ebb and flow of a stock that day.
 
Quote from Fast_Trader:

vhehn, I normally trade semi-conductors such as QLGC, XLNX, MXIM, KLAC but even those have been tricky lately.
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tricky *lately* ? was QLGC ever not a wild horse :)
 
Overbought/Oversold is one of the dumbest and most expensive idea's anyone gets into their heads. Stops will go until they are done, and overbought almost always become more overbought, oversold more oversold. Banish the idea from your mind, it will cost you a lot of money. Look more at the moves structure then at how far it has gone, that will give you a much better idea of when a move has "gone too far".

Brandon
 
I would suggest overbought and oversold are only good when price action is obviously ranging, which is the majority of the time. They become useless in obvious trend days.
 
I use the 9 period simple ma, if price closes above it trend is still in force, if below, bail. Especially if two bars close below. Works well on 5 min charts. Would have kept you in NVDA for a while.
 
Brandonf,

Can you please elaborate what you mean by "moves structure" ?

TIA

Quote from Brandonf:

Overbought/Oversold is one of the dumbest and most expensive idea's anyone gets into their heads. Stops will go until they are done, and overbought almost always become more overbought, oversold more oversold. Banish the idea from your mind, it will cost you a lot of money. Look more at the moves structure then at how far it has gone, that will give you a much better idea of when a move has "gone too far".

Brandon
More...
 
Quote from Fast_Trader:

Lately I'm having trouble getting into Long positions because I look at how far a stock price has moved from the previous close, and think the overall move has run out of steam and will reverse on me any second if I get in. For example, NVDA this morning. Everything was looking good, and I could have gotten in when NVDA was up 3 points but I couldn't do it. I felt like the stock had run out of steam and wouldn't go any higher. Hell, I even thought I should short it :eek: There are several other moves I've spotted but missed out on because of the thinking that a stock has moved up X amount and cannot go any higher. Maybe it's because I began trading in a bear market and am afraid to go Long on stocks that have already made big moves. Any advice from the pros?

Regards.
More...

Fast_Trader,

Yeah, it's hard to say when a stock runs out of steam. I just got out of a 75cents trade which is extradordinary in daytrading. And I was getting out cuz I was afraid it would run out of steam. And now it's continue to power up another 60 cents! Doh! It could have been a dollar+ trade and going!

this sucks! But I guess the answer to your question is EXPERIENCE. After you trade for a while you can learn to hold onto winners longer. Before I would be happy with 20cents trade. Then 30. Then 40. Then 50cents. Now I can hold for the occasional 75 cents -$1.5 move. Maybe next time I'll get the entire move..


trader99
 
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