Tuesday, August 19, 2008

To QUAD or NOT 2 Quad ?

To Quad or not to QUAD.

I really take quads seriously. YOU might have gathered as much. I take them seriously when they go UP and when they go down. I also like to follow up on issues that I discuss.

To those who read my small feature on CHQ in Tobinator’s August Quarterly review, saw that I am enthused about the technical prospects for the stock and its warrants. Today I watched it morph from a Quad Top BreakOUT to a SELL in traditional P & F charts. Now I return to visit it again, and ‘voila’, the sell is GONE, but a downside objective of $4.00 has now replaced the previous Upside Objective of $11.25. YIKES ! !

So to QUAD or Not to QUAD. Lets discuss this - > SILVER dropped out of flight formation like a B-17 hit by AAA Flak over Bremerhaven in 1944. IT DROPPED OUT OF A QUAD BOTTOM. Comparing the most common free chart of P & F, on Stockcharts, shows us that. CHQ did not drop out of a QUAD BOTTOM Formation, but did a step down. I wont speculate why. I am not a fundamentalist. Typically, tho, as a technician, I would have grounds to wonder what caused that drop, technically. Did someone drop a 200 K block on the market ? A 100K block ? Someone, somehow, some way, bombed the stock.

So now we make a decision. QUADDING means you can buy a number of stocks in QUAD BREAKOUTS, putting equal funds in each, and hold the winners and sell the laggards. You can decide if you want to pursue that tactic, and if you do, then we go forward this way ->, If you are comfortable with Short Term Operations, you can wait till it comes out of its NO-SELL-ZONE on a bounce and sell out to re-enter at a lower level.
AGILE as we may think we are, the risk is that we will be psychologically unable to buy it at prices that present themselves later [ higher or lower than we exited ]. By example, my assessment of the support zone here in CHQ is about $4.00 to $5.00. By the book, we cannot overweight in our INTIAL QUAD positions. Overweight will come about naturally as we sell our laggards and keep our keep our QUADS leading the way up.

Therefore in your initial QUAD positions you would do well to define where you are in and where you are out, and resolve any dilemma arising that way…….. This is my update on CHQ, and my way of addressing this particular thing that “went bump in the night”.

STOPS, mental, hard, trailing or otherwise, as long as they are observed, are your friends. They are my friends……..

If you have any problem with the concept of a NO-SELL-ZONE, drop me a line at denaliguide2@yahoo.com, and I will supply you with an easy way to determine the NSZ.

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