Actioning Stop Losses

[limegreen]

My average buy price of FBU is $5.35. I recently topped up at $7.20, and it's been as low as as $6.90, but I'm not concerned. Obviously, I didnt' time my top-up perfectly, but even if I'd paid $7.50, I wouldn't be concerned.

Some things you might note on the following chart. The OBV is still in a solid uptrend (and still respecting the steeper of the two lines). You can fiddle round with longterm trend of the shareprice a bit, but not that not even September 11 took the price below the uptrend line. The RSI indicator has never shown FBU oversold. Thus, buying is best when it's about as far down as it gets, in this case where the red vertical lines are. I'm pretty happy with my timing on the whole. It's very very hard to pick the *exact* bottom.



Being an investor and not a trader, it's clear that selling FBU has *never* been a good idea. I'm not sure whether traders would have done better than a buy and hold.

Having purchased at $7.20, I set a stop-loss. 10% down would be about $6.48; The steeper unconfirmed trendline ias around $6.52, and the long-term trend and the 200 EMA are below that. I still think now represents a good buying opportunity.

[Dazza]

yes agreed at 7.07 mark yesturday's close i tink
but do u tink the trains about to stop though...

[limegreen]

The train could always be about to stop. There are other stocks that are showing far more sign of pulling into reverse that have a lot less going for them than FBU (For example, I think if we were to pick which stock one might easily loose 20-30% on in the near future, I'd be backing NOGOC over FBU. Oh wait, NOGOC did just retrace 70%, FBU would have to drop to $5.50 for that). I might be wrong, and loose a bit of money. That's life. I've lost a lot more than I may or may not loose on this investment.

That's not to say that NOGOC might not have more potential upside. It's also worth noting that people have been speculating about the train stopping for months now, and would have missed out on 30-40% gains if they'd already jumped off...

[Dazza]

agree with u there limmie
i would have thought at $6 it would fall

boy was i stupid not to buy in aorund the 5.60 mark when it went ex-divy last time

[limegreen]

quote: boy was i stupid not to buy in aorund the 5.60 mark when it went ex-divy last time

That's the main reason why I bought. I'm still learning at this too. I've learnt now that just because you've missed a big price movement probably just means they'll be further big price movement. That is, I'd rather buy more of a company like FBU, than buy something that is range-bound. However, another lesson that I've learnt lately is that even brilliant stocks pull back every now and then, and that's a smart time to buy without the sleepless nights. As I said, if I'd topped up at $7.60, I might be freaking, at $7.20, it's just a little random noise.

The question is, will you be, "boy was i stupid not to buy in around the $7 mark when it wen ex-divy last time" in 6 months. I think now is a time for caution, but FBU is solid, and it's still got a near single figure P/E. It's not an AIA or a WAM which while they've been doing well, could have a major SP movement, and end up with a more sensble looking P/E.

[limegreen]

As an interesting aside to the main point, FTX today perhaps represents a good reason for the manual activation of stops. One would wonder if a broker would actually sell your shares at 30% below the previous days close. It would have clearly broken most sensible stops, but with that sort of drop, re-considering whether you want to sell would make sense, especially as the price is recovering (somewhat) this afternoon.

[Snow Leopard]

quote:Originally posted by limegreen

Dazza: Being a trader is about majority intention. However, assuming that your stops are not set tight, then it's very unlikely that they'll be triggered, so you won't be buying and selling very often, so you be so much at risk of being a trader. For example, I recently topped up on FBU. My stop is around $6.50, which would require a *Major* drop in the SP to trigger. Ie, pretty bloody unlikely.

With the close today at $6.46 are you out? And if not will you exiting on Monday?

[Dazza]

PT refer to the FBU thread, he answered my question which is the same as urs in there

man u guys do offer a good persuation to buy in eh, but im still sticking to aia or wam safer bets

this housing bubble talk thingie.. has really got its head around.. me...

[limegreen]

PT. My final indicator, a 135 EMA is still unbroken (although it's had it's toe over the line). The DRiP is also making me consider holding off to Friday...

Daz. FBU do more than just houses, and I think FBU's spectacularly low PE (10ish) makes it safer from a profit downgrade than either AIA or WAM (20+).

DISC: FBU, WAM