First let me point out that I am no TA expert. And second that at I think only a few TA patterns have any significance. And none often fit my definition of a good signal, something like a classical head and shoulders. Still even a 55 to 45 odds are better than a coin flip.
these from my stocks
ALGN- big up gap to be filled between 205 and 225
ANET- support between 190-195
BABA - support triple bottom around 196
CGNX- uptrend line around 63
NVDA- rather weak support 187- 190
PAYC - no TA signal, steady uptrend despite recent decline
SHOP - base 76 months around 90-95
SQ- no TA here, Blow off over last month.
TREE - not falling. Not considered tech stock?
TSLA - weak support around 300
remarks
TSLA ignore TA. It all depends on Mod 3 production
NVDA I think forces behind NVDA are so strong as to be nearly unstoppable, so would ignore TA here
ALGN I am not a gap believer, but others are. Still I would buy near 205
Which stocks might I buy close to today’s prices? At least based on TA?
TREE, BABA,TSLA,PAYC
But in fact I have not decided. I do have cash available.
Historically if you bought stocks like AMZN and AAPL on dips you did well. But it might have taken a long time with gut wrenching declines before you started making money
A key here is that so far the other indices are going up, meaning those stocks are getting more expensive while Saul type stocks getting less expensive. The institutional rotation will be over soon. At the end of it Saul type stocks will be more attractive.
Bear, I really don’t know. Except for a few special cases I do not think it works .Or when it does it is most often a self fulfilling prophecy . But it may shift the odds slightly.
I was just presenting it because I can think of no other way to choose which of the Saul stocks to buy on dips. What other criteria do you have?
They are all great companies so the price you pay is the key.I don’t think fundamentals help much when they are all that good, and clearly these stocks have not been overlooked by investors. The one with the most bubble like behavior over the last month seems to be ALIGN. SQ is nearly as bad. I tend to think they were overpriced then rather than underpriced now.
I don’t see how a company like Alibaba is effected by US tax laws. So I bought a smidgen more BABA this AM. Also some PAYC
But we should keeping mind that most price bottoms are retested at least once.
Variants of TA that might be valuable-. Something that does work, at least work better than a coin flip. - classic head and shoulders, cup and saucer, and my favorite,congestion at fat even numbers like 100. The latter is anchoring at work.
I am more agnostic about gaps. Some have a near fanatical belief in them. Making complex obscure variable stuff simple is easy on the brain but so good on the wallet. Something that always worked would be quickly adapted by all, rendering it useless.
Any market timing I do is not based on pattern recognition like these TA.
I was just presenting it because I can think of no other way to choose which of the Saul stocks to buy on dips. What other criteria do you have?
I mostly:
Trim ones that haven’t dropped as much and add to ones I want to own more of, esp if they’ve dropped more. (note: I think this is what Saul does)
Look at the value I place on the company rather than the amount it drops. For instance, even though WIX has dropped less than any of my other stocks, I haven’t trimmed, because I think it is incredibly inexpensive relative to what it’s worth. (PS is 6.2, for a quick and dirty metric) Conversely, even after the drop, SQ still doesn’t look inexpensive at all. (PS is 16.4)
The key, for me: I don’t try to be perfect. Who knows what the PE, PS, etc should be on any stock? We have no hope to ascertain a perfect valuation. So even though I think WIX might be the “cheapest” thing I own, I still have other positions that are larger, because of my level of conviction in the companies and their extraordinary positioning and likelihood of continued financial success (esp SHOP and ANET). On the other hand, I still have a 8%+ position in SQ, so it’s not like their high valuation scares me away altogether or even compels me to keep my position small.
Basically, I do not ride value convictions at the expense of owning what I want to own, but they do inform my decisions somewhat.
I was just presenting it because I can think of no other way to choose which of the Saul stocks to buy on dips. What other criteria do you have?
Hi Mauser, If you read Bert’s latest post (yesterday) on Nutanix, I suspect you might go out and buy some. To me he’s proved he knows what he’s talking about on Nutanix. He got me in at $20.75 to $22.25 several months ago by pounding the table when everyone else was pooh-poohing it. He’s pounding it harder now. I bought quite a bunch yesterday.
I sold my NTNX after the last earnings. I am probably wrong, there are many smart investors on this board, and Bert, liking the company here.
My sell reasons:
-last financial model has a target operation profit of 15-18%, taxes of 15-20%, so net operating margin of 12-15%. To low for me. I know they are changing their model, and will change their target financial model, but they just announced this target model 3 months ago, and haven’t announced a “new financial model”.
-changing model to only software seams great, but it is a different model for the company, so there is some risk.
Gross margin on this latest quarter, 61.9% vs 65.4% last year. With more software sales, and less hardware, ins’t the gross margin suppose to be better?
But I am basing my posted thoughts on the idea that there is only one new thing that we know today that we did not know a week ago. New, noticeably lower prices. So the prices have changed but nothing has happened to the business outlook. So I am looking at price changes alone with TA. I don’t put much faith in most of it, but over the last year or so have suggested only 3 or 4 times that people consider buying a stock at a specific time because of price action. I was right every time.
I don’t have any strong opinion at this time about short term moves in any of these stocks. We both knew the pace of the last few months would not last. IMO most of these stocks are high priced even at the recent dip prices. So mostly I am observing, watching.
But I am not selling. What could I replace them with?
It’s like selling your over priced California home, paying assorted commissions taxes and fees, and then finding out that all the other places you want to live are equally or more highly priced.
Bert is one of the few worth following over on SA. Mostly it is composed of shorts talking up their story and people needing the money from writing stories because they can’t make it from buying stocks. Because if they could do it, they would. Why would I ever bother writing articles for a few cents a word when I can write them here on MF and sometimes get great feedback?
Considering his past history Bert may have non monetary reasons for his excellent write ups. I am having difficulty in finding an adequate attention span to keep up with the limited number of stocks I already own but will take a closer look at Nutanix.