June 5th - DYN
Cramer is talking about volatility tonight and trying to explain why we are up and down so much. He mentioned that we don't have an equal number of buyers and sellers and that is why the market is working the way it is. I don't know if anyone has ever read any Richard Ney, who tracked Specialist activity back in the 70's, but I always have his theories in the back of my mind when we are going down so much, and up for that matter. Anyway, once again, I read from Cramer's lack of picks these days (very few picks if any in his first segment over the last week or so) I get the impression from him that he thinks the downtrend in the market still isn't over. Its not like anyone expects him to go on live tv with all of his viewers and tell them that the market is crashing and for everyone to sell now because he knows they will do it and then people won't watch his show.
Cramer's only pick tonight was DYN Dynegy Inc.
Closing Price: $5.45
After Hours High: $5.90
Percent Increase at High: 8.3%
After Hours Level Off Price: $5.75
Percent Increase at Level Off Price: 5.5%
Trades on NYSE
Sector: Utilities
Short %: 4.6%
Days to Cover: 5.2
Not as big of an after hours price spike that is normally seen with such a cheap stock, but since it was picked after 6:30pm a lot of brokers don't participate. Nothing really to compare to in the utilities sector as this is just the 2nd stock since I have tracked Cramer's picks and the first (AES) only went from $18.25 to $18.02, so nothing spectacular there. This feels like a 9:30am play here when the real demand might hit and cause a bigger spike above the current level of $5.75. The $6 price would be the level to watch to see if it goes above it. I would speculate that if it doesn't break $6 just after 9:30am but comes close it will probably come down a bit (and a bit here means a pretty good gain from a short sale) before maybe trying to break the price level later, depending on the overall market....even though it was up 2% today on a bad day. Another thing to note is that the 52-week high is $5.81 so that could be a resistance point as well even though it broke it briefly after hours.
posted by CramerTracker @ 6/05/2006
13 comments
Comments on "June 5th - DYN"
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Anonymous said ... (June 05, 2006 7:23 PM) :
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Anonymous said ... (June 05, 2006 7:31 PM) :
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CramerTracker said ... (June 05, 2006 7:35 PM) :
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CramerTracker said ... (June 05, 2006 7:43 PM) :
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Anonymous said ... (June 05, 2006 7:56 PM) :
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Anonymous said ... (June 05, 2006 8:03 PM) :
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CramerTracker said ... (June 05, 2006 8:10 PM) :
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Anonymous said ... (June 05, 2006 8:37 PM) :
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CramerTracker said ... (June 05, 2006 8:39 PM) :
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Anonymous said ... (June 05, 2006 9:04 PM) :
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CramerTracker said ... (June 05, 2006 9:36 PM) :
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Anonymous said ... (June 05, 2006 11:05 PM) :
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CramerTracker said ... (June 06, 2006 8:50 AM) :
post a commentI have been following your blog and it has given me great insight.
I do not short stocks though. Everytime I go short, something goes wrong and I end up covering at a loss. I work Cramer trades like this:
- Do not trade in afterhours or premarket.
- Wait until the opening of the morning and watch the stock gap down from pre-market.
- Get in when the candlesticks show that it floored from pre-market.
- Go wild long on margin and wait for that gap up.
- At the ceiling of the gap, get out of the position as fast as possible and count your winnings.
Simple strategy. . .what do you think?
has it worked?
Well it sounds basically like the exact opposite to the short strategy with the same sort of risks. You are trying to time the bottom instead of the top.
If the stock continues to fall in your case would be the same if it continues to go up in my case where we would both be in trouble.
How easy/accurate is it to time the bottom though?
I assume "has it worked?" is referring to shorting his picks. The simple answer is yes, absolutely. Is it a 100% guarantee, no it's not. My worst trade was one where I shorted the same day of an FDA approval. I messed up and input the wrong price to cover and covered at a loss. The price came down not long after and I could have made a small profit. There have also been times where I set my cover price and then raised it a bit lowering my profit because the price was holding up better than expected. You can't short everything he picks, and I think I have done a pretty good job of weeding out some of the potential danger areas identified in "My shorting rules" that is on the right hand side of the page. On the positive side, I have shorted several times and have been able to cover in a matter of minutes in some cases and no longer than a few hours in others.
It has worked, however, sometimes I have had trouble when I went against Cramers cardinal rule:
"Bulls make money, bears make money, pigs get slaughtered"
For example, I performed my strategy today on ESLR. I went long at the floor and watched it gap up. I quickly sold and pocketed 1300. Then went short a while later at 11.6. The stock waivered around until 12pm. I covered for a $300 loss because I was unsure of the pattern forming. Then after I covered, the stock went into a tailspin down.
I was trying to get a second hit on a respectable profit and I ended up shaving the profit. I should have just walked away with the 1200. It wont happen next time. I will just shut down the trade system and go do my other work for the day.
The bottom is easy to see if you know how to read a candlestick chart. You see the huge red candle with a strong volume in the begginning. Then you start to see some green/red candles along with much lower volume, that is the floor. Sometimes the green/red will take minutes, other times it will take hours to form. The gap up comes with several green candles and increased volume. When you start to see the green/red combo, then we are hitting the ceiling.
I also look at the market depth screen and you can see patterns forming there. For example, some institution was trying to prevent this stock from tanking today. They kept coming in with large bids everytime it tried to fall. That was one of the reasons why I covered. Bernanke was the one who finally put a knife in it.
I have read several books on technical analysis and so its easy for me to see the bottom and the ceiling in the candlestick chart. The book that worked best for me was Technical Analysis for Dummies. It sounds funny, but its well written and will make anyone understand the obscure topic. After you are done reading this 350 page book, at the end there is another list of books that are more advanced.
One more thing I forgot to add is the "knife". The "knife" in this case was Bernanke. I didnt know about the Bernanke knife speech today and that was a serious trading error on my part. I thought I was up on the news for the day, but I wasnt. I always print out the Bloomberg economic calendar and comb through the news. Somehow I missed this scheduled speech by Bernanke. I will be sure to place this guy on my morning news searches from now on.
Hey, I am not one to laugh at Technical Analysis for dummies...I own it myself. It is one along with many other investing books that I am reading at any given time. I think I will be putting the dummy book back at the top of the list to read more.
I never trust what the price might do after the initial drop, but I haven't tried to follow it too much. I like to think that the first dip of the trading day is the Cramer effect and anything after that is too much for me to follow personally.
But many thanks for your comments. Something I will definitly explore myself.
I found the speech schedule for Ben Bernanke and crew. The Iranian President and Ben have one thing in common. Everytime they speak, the stock market goes wild.
http://www.federalreserve.gov/calendar.htm
Bookmarked. Thanks.
You forgot about IVAN. He told us that IVAN was a super sell and it was today.
Very true on the IVAN. I didn't really have it on my radar thinking without a "pump" that I didn't need to track it. Unless there were many holders of the stock who owned IVAN and were watching Cramer and felt the need to sell, it would be surprising if the selloff were Cramer related. Looking at the chart the drop may have been more to do with Bernanke?
I am going to make this call. I watched the interview with Todd Bruce, Crystallex, KRY:AMEX.
The guy fumbled during the interview and sounded nervous. The recap writeup makes him look uncreditable.
I looked at the charts. Crystallex will be under 4 tommorrow.
Thanks for the comment on KRY. I will put in on my watch list today!