GE: All eyes have been on this ticker because it has lost some much of its value. Many are thus wondering if its a buy. I know of folks that bought it 2 weeks ago, a month ago, 2 months ago, 4 months ago. All saying “it’s a bargain”. Meanwhile the stock kept on going lower and lower and even if you’d bought it 1 or 2 months ago you’d now be down 35-20%. These drawdowns are then excused as “oh I am buying for the long-term so I can sit it out”. WRONG. This is self-justification for an emotional purchase not based on facts, and this is why I wanted to show this stock. As an example of “what you think is cheap, the market may think is still expensive”. An example of “without a strategy you’ll lose your money and your shirt”. Clearly the proper way for long term investing was to exit when price closed below its 200d SMA (~$28). It would have prevented you a ~70% drawdown. Nobody in his right mind will sit through a 70% drawdown and say “just wait it will come back up”. Why? Because it will now take a 233% gain in share price to get back to breakeven! Hence, the entry signal is now to wait for a close above the 200d SMA. KISS!
SGMS: This ticker has been getting a lot of call buying lately and looks like a bottoming process is underway. In addition, the daily and weekly charts suggests a 5 wave down move is close to completion, if it hasn’t already, which means we’ll see at least a decent and trade-able multi-month rally/retrace at some point. The good things are : price is breaking out from long- and short-term downtrend lines; and the MACD and RSI5 on the daily and weekly time frames are positively diverging, etc. Hence, there’s a lot going for it. But, price will now have to move over $20 to show it wants to make a higher high as it is now still in the pattern of making lower lows and lower highs.