This AM I tweeted that VMW was a long if it was holding above 80. VMW got on my radar last night when I saw an article on the WSJ site that it was investing in the “cloud”. For those of you who aren’t aware of the “cloud” it is the buzz word du jour with respect to technology firms. Even if you aren’t a primary provider of cloud technology services it probably would serve you well to throw out a press release or two about how you are helping customers move there as it will cause a nice bump in your stock price.
Buzz words have always been important with respect to short term movements in stocks. Back in the 90s “B2B” was all the rage. Then there was “nanotechnology” and in more recent years “alternative energy” firms were just killing it for awhile. Once you know the key words that are attracting the momentum players attention you should be on alert for trading setups that might occur in a stock that becomes associated with such buzz.
Back to the VMW trade. The second tweet about VMW observed that we needed to see some real volume come in to confirm the up move above 80, which would be the precursor for a much larger move in the stock. The reason why volume is important in this particular example is it would be an indication that some major momentum players were moving into the stock and most likely intended to push it higher in the days ahead. But the volume never materialized and I was stopped out for a small gain when it broke its intraday uptrend.
- pay special attention to stocks on a day a story is released that contains key “buzz words”
- indentify important support/resistance levels in the stock for potential entry points
- only lay into the stock if their is significant volume driving it through key inflection points
Cloud voodoo only on ground floor for enterprise-oriented biz, due to the long sales cycle. NTAP, CRM, VMW, FFIV, AKAM and others still in decent trends on the dailies.
Steve, i do not see any tweets yesterday about $VMW. Are you sure the tweets are going through?