Stock Trading Predictions & Technical Analysis: MGM

Friday, October 30, 2009

MGM - Continuing to trend down

MGM - WAIT

Unfortunately as I feared MGM continued its trend downward despite strongly being up yesterday. My entry seemed a bit pre-emptive, and my stop loss got trigerred almost exactly at where I had set it before it bounced back up, at $9.15-$9.16. Seeing this as not the first time this happened I will stop posting exactly what are my personal entry price and stop loss/buy triggers. However, I will still say if I'm currently Long or Short the stock I'm talking about. One big mistake I did with my stop loss order of $9.15 is the fact that it was so close to Thursday's low of $9.12, and often after such big moves whether it happens within one day or more, the stock will likely revisit the low of where it bounced back up from. However if I had to set a lower stop loss, I would have to be able to risk taking on a higher loss in case of a reversal. The only positive signal from today is that MGM held up at this current support level of $9.12-$9.13. With that being said I did take another gamble today, with the major trend of MGM being still down, and took a new position after getting whipsawed. I have to warn you that what I'm doing is extremely risky, and a move below the current support level will give us yet another SELL SIGNAL. My decision on taking a long position with MGM does not have to do with technical solely but a lot has to do with the earning report coming up. But this could go either way, and will depend on market conditions. I did feel that I still had to disclose that I'm currently long MGM, as I feel I may have gotten whipsawed again.

LONG MGM

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TECHNICAL INDICATORS

BUY SIGNAL: Indicates the possibility of the start of a new up trend or the continuation of the current up trend. This signal may be often given in the early stages of a potential new up trend that was preceded by a down or sideways trend. Such signals do not always succeed and may fail at time.

BUY: Indicates that the current up trend is already in motion and a BUY SIGNAL was already given earlier. A BUY does not necessarily indicate that the stock will continue higher from here, but simply that the stock is trending up. The further into the trend you decide to take a long position, the more risk you have of seeing it reverse back down sooner rather than later.

STRONG BUY SIGNAL: Indicates a stronger, more significant and reliable signal than a BUY SIGNAL which usually has less chance of failing. Such signals do not always succeed and may fail at time.

STRONG BUY: Indicates that the current up trend is already in motion and that STRONG BUY SIGNAL was already given.

SELL SIGNAL: Indicates the possibility of the start of a new down trend or the continuation of the current down trend. This signal may be often given in the early stages of a potential new down trend that was preceded by an up or sideways trend. Such signals do not always succeed and may fail at time.

SELL: Indicates that the current down trend is already in motion and a SELL SIGNAL was already given earlier. A SELL does not necessarily indicate that the stock will continue lower from here, but simply that the stock is trending down. The further into the trend you decide to sell a position, the more risk you have of seeing it reverse back up.

STRONG SELL SIGNAL: Indicates a stronger, more significant and reliable signal than a SELL SIGNAL which usually has less chance of failing. Such signals do not always succeed and may fail at time.

STRONG SELL: Indicates that the current down trend is already in motion and that STRONG SELL SIGNAL was already given.

HOLD: Indicates that traders who already hold this stock, should hold on as long as the trend persists. This signal is usually given during an up trend for which it would be considered too risky to take a long position at this point.

STRONG HOLD: Indicates that the current trend has been in motion for a while and rarely deviated away from the trend. Although the stock may continue higher, there may not be enough potential up side to trigger a BUY SIGNAL. This type of indicator usually means that the stock has very strong support levels which may have been tested but not broken.

WAIT: Usually given during a sideways trend for which we are waiting for a move that would trigger a BUY SIGNAL or SELL SIGNAL. This could also indicate uncertainty and the risk that would be taken if you were to take a long position at the current level. Taking a long position after giving a WAIT indicator is considered a gamble.