Guys, just coz the rsi is going ballistic does not mean the ride ends. It means be careful, it should end soon. For how long, how large will the retrace be....who nows...maybe no retrace at all but a lazy drift to the right. So, how do you stop a speeding bullet without leaving blood on the floor? You don't. What is your entry criteria once the set up for a short is complete, as it is now. Well I wouldn't touch it until I saw a close below BB SD1 and potentially the 10ema with a close stop as a close above either of the above two markers. See how it reacts to the 20ema if it gets there and if it closes below you may get more of the retrace you look for down to BB SD1 lower and potentially into the bear channel BBsd1-sd2. I would also plot my fibs in to see if the retrace reaches any key levels and potentially turns. Entering a short without any of the above would be a little risky. Good luck.
Alexander Elder talks about a concept called the 'Hounds of Baskerville' trade. If an indicator tells you what the direction 'should do' but the price is doing exactly the opposite, it is a very strong entry signal for the opposite trade. So if an RSI is overbought, but the stock keeps moving up, it tells you that bulls are really in charge, and that the recent up move was not a flash in the pan. Personally, I find it a particularly useless indicator
absolutely nothing wrong with his call. You cannot fault someone who exits a position based on his investment style & philosophy. 150 is a hellava nice profit. What would have been a wrong call is if he decided to short the stock.What most people fail to realize, is that a sell rating does not mean short the stock, it just means that consensus is that the stock will underperform the market and that there are better investment opportunities out there.
SKAAPTJOP Here's my problem - do the technicals drive the traders or do the traders create the technicals. In a highly liquid counter, it really doesn't matter much as they swing as "push and pull" determinants and crystalise about the mean. In a relatively (I use the term advisedly) untraded counter, the technicals are really nothing more than an indicator of investor (not trader) sentiment. When you call for an "overbought" position you are betting against a much savier holder (the "stronger hands" type.) So - if you like a stock like CPI (or others of its ilk) you really do have to just site it out through thick and thin or risk being left behind.
The day i buy this stock you can short it i promise you. Too many times before have i not wanted to miss the ride by getting in on the crest of a wave to sit and see it fail dismally. Now I can honestly say without emotion that i think I have missed this one and will look for the next climber as the JSE has taught me there will always be other oppertunities