Baby

[legion3pm]

bought it earlier today at 23.80 looks like its gonna bounce off the 50 ema after the pullback from the highs.

[Goods]

nice call Legion. Looks like a winner

[legion3pm]

thanks GOODS. im not sure if its gonna run or not it looks like its gonna bounce off the 50 ema or it might have just gone up b/c of the day the market had friday. what do you think about it? think it was a good spot to buy in or would you have waited? or just not mess with it at all?

[Goods]

I'm sure Friday's rally had something to do with it but BABY's had a solid uptrend for years now.

The optimal place to buy would have been when it touched the 50ema right around $23. However you're in a nice position for a short term uptrend inside the channel. If it follows through and can make a higher high, I'd expect it to see somewhere around 26.50 in the near future. It's pulled back over 10% off highs and pretty quickly at that. Although on just average volume.

To play it safe short term, I'd probably put a stop beneath the Aug 21st low of 22.72. Or you can give it a bit more space to under the July 30th low of 22.59 if you like. Lower than that breaks the 50 and doesn't give 200 support until around $20 although there's some support around 21.75 where it bumped off a couple of times before continuing it's uptrend, if you want to hold it that far down.

Earnings were July 31st, they beat by a penny per share and raised 2008 guidance. So fundementals look good.

The important thing is the history it's had of bouncing off support. You should expect that to continue until it proves you wrong.

Other opinions are always welcome.

[legion3pm]

thanks GOODS. great info.

[whodi]

Originally Posted by legion3pm

thanks GOODS. im not sure if its gonna run or not it looks like its gonna bounce off the 50 ema or it might have just gone up b/c of the day the market had friday. what do you think about it? think it was a good spot to buy in or would you have waited? or just not mess with it at all?

How is it going legion. As far as answering your question if where you bought was a good spot, I would say yes and this is why.

[whodi]

Internet went out unreal. Typed a lot with charts ect... Fing BS. Kind of hitting on what Goods mentioned.


Anyway. What yo want to do when using a 50 or a 200 EMA is to see if it really has any meaning. What I mean by this is does it really hold the stock up. You will see stocks that break past both and drop past both all the time, so in that type of situation, you can't really base a trade on one of those moving averages because it has shown in the past it doesn't hold it up well anyway. Now in BABY and other stocks like this, look at the 1 year and 6 month chart and u will see the 50 EMA has held up well almost every time it pulled back to test it. These are the stocks that you take this serious in. It is impossible to always pick the right entry point every time or exit point. You bought right as it started bouncing off it, which is the right thing to do because this stock has shown pretty much the last year how important this moving average is. Now could it pull back a little more from where you bought it and then start moving up again, off course but thats not a bad thing because now you have a nice position, and on the pullback buy some more to get a better average price. Now that you have a better average price and it starts moving up you are set but make sure to keep the right stop loss in and if it doesn't pull back after this bounce for a run I don't think you will mind because you have a nice position already as its running and your not chasing. This is the mentality you have to have when trading because its to hard to cherry pick positions and if you are in a good opportunity and try to get cute and think it may pull back some and it runs, you will be kicking yourself and you will be leaving a lot of profits on the table. Always remember to use those longer charts when you think you see a buying opportunity on a pullback because thats going to show you just how strong these EMA's are for that one stock. The 50 seems to be very strong for BABY and has only dropped about 2 points under it since the start of the uptrend from October of 07 and the 200 was right there for it to bounce off it. Here is what I am talking about, so you can really see how strong the 50 EMA has been for this one stock.


6 month has held it solid since end of March


http://finance.yahoo.com/echarts?s=B...urce=undefined


1 year: Since end of September it has been in this nice uptrend holding the averages very well.


http://finance.yahoo.com/echarts?s=B...urce=undefined

[legion3pm]

thanks whodi. great info too. i learn more from posts here then i do from reading books. course the books did help get the ball rolling but the way you guys explain WHY things happen helps me more then anything. thanks guys

[whodi]

Originally Posted by legion3pm

thanks whodi. great info too. i learn more from posts here then i do from reading books. course the books did help get the ball rolling but the way you guys explain WHY things happen helps me more then anything. thanks guys

NP Legion, books are going to give you the knowledge you need but you also need the hands on experience, which a book can't give you. Thats why I always recommend paper trading but take it real serious as if it was a real trade and later on after the market closes, go back to see why you did what you did to learn from the trade. I paper traded for 6 months before I traded with real money even though I had it. I wasn't in a rush and wanted to gain experience trading, so I wasn't raw with my account. My friend that was mentoring me was trading my account for me but then I would treat it as homework to see why he bought or shorted the stock to learn, whether it was technically related, sector related, news ect... He always stressed PATIENCE and it will come. Everyone has there own style and can't stay disciple but what he taught me as worked for me, you just have to find out what works for you.

[Goods]

Still in on BABY Legion? Looks to be shaping up nicely with solid gains from your entry point.

[legion3pm]

yeah still holding it maybe should have sold it today at +$1.00 but ill hold it and see what happens

[legion3pm]

stopped out today at 24.55

[Goods]

Not too shabby Legion
May want to keep an eye on it. Today's market was crappy for sure and BABY held up, except for some profit takers end of day. I may get some next week myself if it stays solid.
Nice work.

[legion3pm]

thanks GOODS. yeah i should have maybe pulled the stop on it today since the market was pure crap but oh well ill keep and eye on it for sure.