Originally Posted by savant111
Here are some concerns I would have this one. I'd like to know more about your thought process and would be interested in your response to each:
1) the volume looks pretty ugly to me. Lots of big red bars on the down days.
2) the 20 day previously seemed to be a support level for the stock. It is now directly under it. Couldn't this be possible resistance? Why not at least wait for it to cross Tom before entering?
3) are you worried about the general market? I've noticed the vix and tilt start to trend up and the fxe start to trend down. Also a few leading stocks are starting to lag.
4) SSYS has been lagging the market for the last month. Typically a bad sign for a high valuation stock
I get that your looking to buy dips and can keep a tight stop here, but do any of the above concern you?
1) I do primarily volume analysis and yes the volume was average to above average on the red bars, but what's very important is the open/close/high/low price on those days. You can actually build bullish momentum on consecutive down days if the close is continually above the low of the day. And you'll notice that all of the red down days closed above their low. Now I wait for the trigger which is usually the first black day.
2) I look at EMA not MA. We are actually above the 20 day EMA now which I consider support, not resistance.
3) Absolutely, I'm always worried about the general market. I'm always looking to be properly hedged. Because I'm long SSYS, I'll also try to be short a similar security (price, volume and volatility considered)
4) SSYS was performing with the market until about a week ago. After earnings they went through a consolidation period which appears to be nearing a close. I expected today to be a run-up which it was early on, but then Nasdaq did a nose dive. I'm sure the run-up will be tested again in the next few days.
SSYS held up pretty well in today's trading. NASDAQ took a complete nose dive about midway. I'm still bullish on SSYS, but will be watching it very closely the next few days. If it starts acting funny I'll exit my position early.