Friday, May 20, 2011

NOG Day trading chart

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After the stock prices crossed the MA, there was sustained buying all day long. The best thing is to get out of the position even for a small loss when the stock prices cross the MA. This the rule even for day trading. 

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This is a five day chart.

If one has position on a stock with 30 MA in view and following the trend analysis it is better to just wait at least 4 days if the stock goes against your position. Because if the
analysis of trend is right the stock will follow the trend to the bottom or the top.

If one is doing day trading then one has to  observe the day chart and follow the day chart MA. If one does not follow the day chart one will have idea when to sell and when to buy and the day trend. One has to be very discipled and follow the Day Moving average impeccably. The hard facts are on the chart. One should not guess because the stock market does not follow any individual analysis. It is an aggregate movement and unpredictable.

for example on 5/16 the stock went up and closed lower on day trading. Any way if one follows the rules of day Moving average, one can get out of position with the minimum loss when the stock is moving against position.

This is an important post.

Day trading Time rules

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This is example of down stock. 


From observation of these graphs some conclusions about day trading stocks that are up or down 5-8 percent at opening half hour. If a stock is going to reach around 14 percent by 9 am pacific time, then it has to move up or down with high volume. 

So the safe way to deal with this situation is to wait till 7.30 am. See if the stock is consolidating on the moving average. 

1. If the stock crosses the Moving average that means the trend is changing. Then one has to get out of the stock

2. For stocks moving down the moving average, NEVER EVER BUY THEM. From these graph it is evident that they do not recover for the rest of the day and one can be locked in a bad position and loss situation. 

3. For stocks moving up the moving average, NEVER EVER SHORT THEM. The graph above shows how when a stock goes up it will not come down for the rest of the day. 

It is only is some rare instances that something unusual can happen but otherwise this is normal behavior. 

Moving averages not shown in these graph from but available when graphed on google.

4. The first One and half hours is when the most action happens for these stocks. From 6.30 am pacific time to 8 am. This is a similar pattern for all the graphs. 

ARUN: day trading

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Debt/Equity Ratio0.00
Gross Margin69.12%
Net Profit Margin-1.73%
Shares Outstanding100.80 Mil
Market Cap3.3 Bil
Institutional Ownership86.50%
Stock went down by 15 percent. I was thinking the total volume of shares floating is 100 million. Today's volume is already 10 M. Heavy selling. Unless new buyers come in, this stock will go down. 
1. Should have shorted at day opening at 8 percent down. But its hard to guess, if the 8 percent down was temporary and it will recover in the mid day or it is permanent with heavy volume like today. 
But the ration total shares/ today volume is approximately equal to the percentage of price down. I mean only during heavy volume days or heavy buying days. 
Stock hitting resistance at 27.5 already 15 % down. They can drop more too depending on how much speculative accumulation of stock happened before.  Need to study these models further, that fall down from the top with heavy volume. Usually a signal for down trend to begin. Need to study the single day chart. Same thing happened to OPEN a few days back. 

I should have documented it here. 

OPEN dropped to 87 on that big sell day from around 92. But one should not bet that the stock will go up for sure the next day. It usually does, but there are cases like HEES, where the stock kept dropping and dropping.

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HEES dropped from 20 to 16. thats like 20 percent down. then a small rise then dropped gain. 

I am sure there are a bunch of short sellers today on ARUN and in case on is in a wrong position, the best time to sell during day trading is during the closing time because, short sellers are covering and also some new buyers want to accumulate.