Tuesday, September 12, 2006

RE: up and down

A couple days ago my father asked me about two stocks. My response is offered below.
Sent: Sunday, September 10, 2006 11:19
Subject: up and down

Mark here are a couple. I would like to know what you think?
2 weeks for a up CRL
2 weeks for a down IDCC
CRL seems to be a decent stock for a long position. Of course we’ve seen some confirmation for that since you sent this message (so congratulations on a good pick), but unfortunately we don’t have a good entry point. The entry point would have been on Thursday of last week however the reward:risk didn’t look good, not to mention the fact that it failed to put in a higher peak and consolidated around $41 (which I’d have looked at as a possible weakening trend, and why not just find a better stock?). CRL has confirmed it’s uptrend and now looks like it’s going to push through up to it’s previous range before gapping down back in mid-May. We’ll probably see it stall out at around the $45 mark, assuming it can break through the $42.50 mark that it hovered around in October & December of last year. This is one that I’ll keep looking for a good entry point in order to capture some of that movement

As far as IDCC... hmmm... Honestly, the 1 year direction is up, and the most recent movement has been up (after some major selloff). I wouldn’t be trading against the trend. Again, you looked at it few days ago and I don’t think you’re wrong to have thought we could see a reversal and downturn on Monday... However, it continued it’s uptrend yesterday and today. The fact that it can’t seem to sustain a price up above the $35 mark means it may be at the end of it’s uptrend and the previous couple days moved up as it followed the general markets more than it having individual strength. We could see a downturn, but this is trading against the trend and the trend is your friend. It’s just more risky to make that kind of a trade than to trade with the trend.

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