GE, SGMS updates 12/19

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!

Where will GE bottom?! No need to 2nd guess, just wait for a close back above the 200d SMA to go long. 

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. 

Price is starting to break out from short and long term downtrend lines. Technical indicators moving up
positive divergences on weekly MACD and RSI5 suggest up move in the making.