I have been attempting to learn about the market and trends. I invested into a stock that seemed to be doing pretty well, but then it tanked. I am very close to selling, but have been looking at its past and it seems it has done this three times over the last two years. Based on the graph I included would you hold onto this stock longer? Also would someone be able to tell me what I should be looking at on this chart?
I would looking at a 3 month chart with bollinger bands included. I take it you already ran the fundamentals. What is the stock symbol?
I would prefer knowing the symbol so I could at least see the underlying fundamentals to determine if that is what pulls the stock down. But in general you want to look at the chart along with a couple of studies to help decide when the trend might be changing. You are looking at a weekly chart posted above which is slower to change trend directions but is exactly what you want to look at for long term holds. If you are shorter term you should look at a 6 month to one year chart (I prefer candles) with daily ticks. Then add a MACD study using default criteria and second add either a slow stochastic or RSI study. Then, downtrends are not your friend so you should look for uptrends (30 day SMA pointing up. Then if the MACD is positive above the 0 line and the stochastic is pointed up (RSI rising if you are looking at that) they are positive signs
I am not sure what bollinger bands are. I am still new to this and learning, so any help is appreciated. I am looking on yahoo finance and they only have a 1 and 6 month viewing option. The company is ZOES. Thanks!
Yup, and if you want to get some better charts, just click the live charts button at the top of this page.
I purchased it for $30.32 on August 23rd and then, unfortunately, a couple of hours later is when it tanked. I have been holding on thinking it will upswing, but have lost close to 30% on it. I only bought one stock for learning purposes, so not that big of a deal, but at the same time I don't want to lose money, just to lose money.
I have to say, they don't look really good right now. They have had projections cut by analysts and price targets are dropping to about 30 bucks a share. The question is how long will it take. Next quarter earnings is expected to be negative with a loss around 5 cents a share. Plus side the earnings projections are positive beyond that. It does have institutional and mutual fund holders but not sure for how long. If they are selling out, that is probably what is pulling the stock down like a falling knife right now.
This is a 3 month chart on ZOES and it doesn't look good at all. I wouldn't even bother with the fundamentals after looking at the chart, You might keep an eye on the news and see if there is anything going on.
Right, the three month chart looks horrible and lucky me invested an hour before the drop-off. What about this article? It has a lot of up-site...free cash-flow while expanding and growing stores, etc. As it mentions on the article, they can't predict the floor and that is why I have been holding on this long...waiting for the floor and to at least get some money back. http://www.fool.com/investing/2016/...edium=feed&utm_source=yahoo-2-news&yptr=yahoo Would it be best to sell and cut my losses or wait it out a bit more to see if anything positive would come out of it?
As a personal preference I don't pay much attention to Motley Fool. Give special attention on the fundamentals that you can most likely look up on your brokerage account. Once you get past that use the bollinger bands in your charts. There are other indicators like the RSI and others you will want to learn as well. A 2 year chart tells you where a stock has been but a 3 month chart can give you a better idea of where it is going for a swing trade. http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:bollinger_bands
Opinion here... Yes it would probably be best to sell and take the loss. One thing I was wondering though is what are your transaction costs? Dealing with one share the entire entry and exit fees get applied increasing your loss. If you are going to trend trade, you will need to be willing to exit a trade at a loss when the trend goes against you. To improve your chances in a trend trade you should do a screen for candidates and once you identify a group of stocks check them for current trend direction and look a little at the fundamentals like EPS and projected growth on the ones with a trend pointing up. When you enter into one watch it for trend change and if it drops below the support level that was present when you bought it, get out. If you follow those steps you will probably be right 4 times out of 10. But by exiting the losing 6 trades quickly and letting the winning trades ride the uptrend you should come out ahead. Fun huh? Here is a quick article on Growth Investing http://www.investopedia.com/article...dirN&qo=investopediaSiteSearch&qsrc=0&o=40186 and look up the terms used to get an understanding of what you are looking for in a growth stock. Then here is a sample Growth Screen to play with http://finviz.com/screener.ashx?v=2...oe_o15,fa_sales5years_o15,sh_avgvol_o200&ft=2 Click Here If I did the link right it should take you to a small chart view. Note the trend line on most of them
Thanks everyone, I appreciate the help! I am using Robinhood, so I don't have to worry about the transaction fees for the small amount of stocks I buy.
You guys were definitely right about this stock. I waited even longer and lost more. I just sold though; watch now the stock will shoot back up. Thanks for the links! I will look over them and learn, any others are welcome! I appreciate the help!
The important thing to remember is to LEARN from your mistakes, but not to dwell on them. You'll bounce back and be a better trade. Every loss you should focus on the positive, which is that you got a lesson out of it and will be more able to avoid the same mistake in the future.
