"Be afraid when people are greedy and be greedy when people are afraid." - Warren Buffet
Saturday, July 19, 2008
Missed Opportunities
So earlier this week, I think it was Tuesday night, I couldn't sleep, and I was thinking about all of the dour economic news that kept pouring across CNBC at work that day. Stocks were getting pummeled and people were in a near panic. I thought to myself, this is the perfect buying opportunity. I jotted down a list of five stocks and people were morbidly selling that I thought were being driven more by fear rather than by reasonable forecasting. My bottom-feeding portfolio of five "dogs" included four financials and one manufacturing company: Freddie Mac, General Motors, Lehman Brothers, Washington Mutual (Wamu), and Citibank. If I had $1,000 to throw into each stock on Tuesday, my $5,000 total investment would have grown to $7,500 by Friday. But, alas, I do not have a $5,000 slush fund. I think I should start one, especially for times like this.
Subscribe to:
Post Comments (Atom)
1 comment:
Technical Speaking
Figured I'd take a gander at your Fav Five with a technical eye.
FME -- One has to go back to almost the year it went public to find a price as low as it is. Not a good sign. With a 13 down to 5 up days in the last 3 weeks, that's also not a good sign. Finally, although the stock rebounded late this week, there is significant resistance at 9.88 and price has almost recovered to this point. So not much upside left and loads of downside pressure.
GM -- The crawl downward from 24 to 5 was not on particularly high volume. In fact, the bounce this week was on higher volume which is bullish. Resistance is going to be at the 50 day moving average (about 15) and again around 16. Nice 20% upside potential, but nasty 40%+ downside potential to 8.81 low.
LEH -- Last two weeks have been volatile, as you said. Drop was on very high volume, but the recovery shows volume drying up (Fri was on less than 50 day average vol). Resistance at 20, and stock shows evidence that it might rest there. I'd like it better if it goes above 20 in high volume. Otherwise, upside appears limited.
WM -- Resistance at 6, and Fri it closed nearly there. Not much upside unless it goes through 6 on higher volume.
C - I cannot really judge this one technically in terms of resistance and upside/downside. The last three days were very bullish with gaps upward and opening low in the session then closing near the high. Resistance could be 22, 24 or even the last high around 26.
Post a Comment