When Not to Dump Your Stock

“Stop the tape,” barked the engaging if not brilliant firm partner (wait till you find out who this describes) during a Video Review Session.

He continued,”What are your thoughts of NVTL presently?”

A few brave (ill-advised?) noobs blurted,”Move on!”  And I could swear there was some booing to emphasize their opinion of the NVLT they had just witnessed on the tape.

The partner shot back,”No!”

Ok so that partner was me (hey it’s my blog I can describe myself as flatteringly as I would like). The noobs were our new traders.  This VRS was today at 12:45 PM as we replayed the tape of NVTL from today’s open.

Often a new trader is challenged to decide when to move on.  Is this stock just not going to move?  Is it getting ready to move?  Should I find a better stock?  Should I dump that hot new chick I just started dating who emails me like fifty times during the trading day? (again remember she is really hot).   What do I do?

Well in NVTL you sit in your seat, and wait.  It was not worth dumping for another stock.  There was significant volume being done in NVTL.  It gapped down.  It ticked down on the Open.  It was in an intraday downtrend and consolidating.  There was a huge battle at 9.25.  The next level was not until 8.80, the 200-day-MA.

Let me be clear, an important part of trading is waiting, watching, and getting ready to pounce.  You don’t have to be in a trade to be trading.   Often it takes some time before your stock(s) is ready to make a significant move.

The key is the volume, and watching the prints.  An experienced tape reader can see the interest in the stock from watching the way a stock prints.  An inexperienced tape reader can also tell by just watching the huge amount of volume done at the same price.   It’s all about the volume.

NVTL was an object of interest to stick with.  You just had to wait.

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NVTL 10-30-09

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