Wednesday, May 30, 2007

Never catch a falling gem?

It has been a long time since I last posted on my blog. Please accept my sincere apologies as i have been very busy with work. I truly hope that i can start posting more regularly going forward but after my June holidays to Japan... hahaha... The blog will make me more disciplined to look at the market each day for attractive set ups.
Gems TV is one gem which you should avoid once it breaks 118 and it is still heading to new lows today and is near the technical breakdown objective of 70 cents. You can see that once a gem loses its shine, the RSI and the stochastic and remain in oversold position for a very long time.
The above chart reiterates a few points which i would like to highlight:
1. The Trend is your Friend
2. The importance of having a stop loss in your trades. Make sure your stop loss is tight.
3. Technical indicators are just as its name imply, an indicator. It would be good to know what are the fundamentals of this company, whether analysts like this company and their fair value for this company as well, As you can see, the technical indicators can remain 'oversold' for a long time so it would be wise to have some FA skills as well.

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