Today's Chart of the Day is the stock that has probably frustrated me the most this year. I remember writing a post about it few weeks ago - Sixth time lucky?? Or was it seventh time lucky? I forget. Anyway, the stock has made numerous attempts (six or seven) to break out but has always failed. I must have played it as a breakout play at least four times and ended up getting stopped out. I guess overall I still must be in the green (barely) with the stock as once I played it as a ranging stock and got a decent bit out of it. But that's not the point.
The point is that I saw the stock setting up nicely again on Friday. I wanted to get in. But I froze. There, I admitted it, I froze. I thought of all the times it had fooled me previously. Knowing my history with this stock, was I willing to trust it again? This was the first thought that entered my mind. Then I thought, what was the worst that could happen? The stock fails to breakout again. And I get out with at the most a 2% loss. No big deal. Not unlike any other stock I would play. Plus things were going to be different this time. The sector was looking really good and the stock had a fake breakdown last week, which made me think that this time the move was for real. But hadn't I thought the same the last four times too?
Plus, I would be lying if I didn't admit that it was a little bit personal now. I am not too proud of this thought as I know I shouldn't have emotions tied up to any stocks, whether winners or losers, but hey, I am human! This stock owed me. How would I feel if it ran this time with me just waiting on the sidelines just because I was too much of a chicken to trust my own trading system? Here, I must point out that though, it was a bit personal with the stock and I had the feeling that I had a score to settle with it, I was very ready to admit defeat, tip my hat to the stock and walk away with the 2% loss if it was a failed move again. I still am.
All the above thought process must not have taken more than 30 seconds. Ladies and Gentlemen, I present to you DMAN. Needless to say, I got in it on Friday.
Here are some more setups I like for the week ahead.
Take care and good luck!