Typical RS1 Member
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How are the Buy & Sell prices chosen on the List?
Here are the basics on how I figure the buy and sells. First I go to the Stocks & Options page at E*Trade, where I run a quote on the stock. Once the quote comes up, I click Historical Charts on the left side of the page. After the chart materializes I hit the "more options" button, located just above the chart. Here're the settings that I use once the variety of options are presented:
1. Times; 3 months
2. Frequency; Daily
3. Price Display; Candlestick
4. Moving Averages; Exponential (3-line)
6. The other options I leave on default
7. Now I hit "Draw Chart"
Okay, there's the chart, (by the way, you can run the entire List RollingStock100's quotes or charts at one time. If you already have a chart pictured and then decide that you wish to view yet another stock, but not its quote, just type in the new stock's symbol, but don't click "GO," that'll bring up a quote. Instead click "Draw Chart" and you'll get the new stock's chart, with the same chart settings as you had used for the previous stock) now let's see what it says:
Look for the stock's most recent high and low, as indicated by the graph (where the price changes direction.) As you can see in this case, the most recent high is slighly over $4.00 and that it occurred about six trading days ago, so that's the price that I would think should be targeted as the "sell price." This is normally known as the stock's "resistance price/height/level/point/or whatever." The word "resistance" is what you want to remember here.
Now for the low; simply follow the graph backwards (or to the left of the most recent high if you prefer) and find what the price of the stock was, when it hit its most recent low. In this case it was between $3.00 and $3.25 during the last couple of trading days in January (the only days present on any chart are actual trading days, no weekends or federal holidays.)
If you're thinking "that's it, I got it" you're mistaken. Though in some cases it really is just that simple, in isn't this time. The fly in the soup for determining the estimated buy price of this particular stock, is the fact that we have seen a poor earnings indicator, symbolized by the upside down orange triangle, with the big "E" on it. Had the triangle been right side up, we would've been provided with a different story. It's very likely that the price today, would be higher than it is right now, but back to determining the buy price.
Obviously, because we see that the current price is lower than the last cyclic low, I wouldn't estimate the sell price to be $3.00 to$3.25. So now we have to look back even further on the graph, until we see the next low. And there it is, right between $2.25 and $2.50, it looks like it hit that low (also known as "support") during the last trading day of December. So there you have it, as of today's date, I estimate DWTI to have a Buy @2.25, Sell @4. If the price does drop below $2.25, you'll find that I will change the Buy from @2.25 to @?. Then, once the price turns upward again, I'll change the Buy to whatever the low was, when the stock hit its "new" most recent low.
As you can see, all that I do is rough in my estimated Buy and Sell prices for each of the stocks, as I perceive them to be, from my viewing of the charts. Now if you don't want to go broke, with your new endeavor of buying and selling Rolling Stocks. You'll definitely want to monitor the stocks that you're interested in, on a daily basis, whether or not you have already bought them. To include keeping up on any News Releases about the company, the industry that your company falls within and the market in general. Many things can and do effect a stock's price, a smart Trader is always keeping an hear to the news.
As you learn more about the stock market, you'll undoubtedly encounter many "proven ways" my many "successful" people. Simply read the subject matter available for each of these methods and apply some common sense. If it's too good to be true, it probably is. If you're being charged for the information, and it sounds a bit too high, just go to the library or post your questions on any of the stock related message boards. You'll be amazed at how many people, who actually know what they're talking about, are willing to help you out for free. My "method" for buying and selling Rolling Stocks, really isn't a method at all. I just monitor stocks that appear to Roll; try to buy low and sell high; and try to keep up on the company's news.
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