Stock Trading Predictions & Technical Analysis: TIVO

Friday, October 23, 2009

TIVO - Rallies +10.00%

TIVO - BUY CONFIRMED - STRONG BUY

Looks like my strategy has worked to perfection today, regarding TIVO. First on Monday, TIVO gave us a BUY SIGNAL when I enetered my position at $11.30, and was confirmed when it held up above $11.00 on Tuesday. On Wednesday we could observe a shooting start for TIVO which usually indicates a top within a trend. However TIVO had strong support at $11.00, and I expected to see it go back around this level before bouncing back. Indeed TIVO did go as low as $10.94 on Thursday before bouncing back up strongly, giving a new BUY SIGNAL. Keep in mind that despite having for example a resistance level at $11.00 it will not always bounce back exactly at the level indicated, but usually it should be close. In fact, as I indicated since Monday I had set a BUY STOP trigger at $11.75, which is what I would have considered a strong enough move to continue to see the price move much higher. Finally today, after eventually going $11.75, TIVO continued to rally up +10.00% going as high as $12.67, and closing at $12.58. This gave us a BUY CONFIRMATION and a STRONG BUY the moment it went over $11.75. Please note that the $11.75 level is what I considered a strong enough move over the $11.66 level for us to get a BUY CONFIRMATION & a STRONG BUY. My average purchase price is now at $11.43, with a new STOP LOSS as $11.58, guaranteeing myself to exit this position with no losses. It's hard to say right now how high TIVO may go before pulling back again, but when it does whether it's on Monday or in a week or so, TIVO's new support level is now the old resistance level of $11.66. A sharp cross below $11.66 would give us a SELL SIGNAL. Right now TIVO is a STRONG BUY for the long term trend, but you can expect a pullback whenever it comes at around $11.66. So be cautious before deciding to enter a position. Keep in mind that TIVO is currently in overbought territory regarding the RSI and Stochastic, but stocks that have the tendency to remain mostly around overbought levels, indicates strenght and that the stock is trending up. Despite a STRONG BUY, the longer you wait to enter into a stock's trend, the more chance you have of getting whipsawed. The more you wait the less risk you take of seeing the signal fail, but when you catch a trend early you will reap in more gains while taking on more risk (risk/return ratio). It's for you to decide when to jump in. A word of advice is always to have stop loss orders set, and take losses of no more than -7.00% or -8.00% when a stock doesn't move in your direction. I like the fact today, that TIVO was up strongly when the market was mostly down. This is a sign of strength, and we also had heavy volume which only helps driving the stock higher.

Long TIVO@ an average of $11.43 - Stop Loss @ $11.57 (+1.22%)

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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.