The run up above the ma carried IBM up 19.6%, from the April 2009 close of $103.21 to the June close of $123.48. Annualized, the gain was an excellent 16.8%
The last bear phase, below the ma, lasted seven months.
Over the long run, IBM has been anything but a go-getter. It has been trending more or less sideways since 1999, when the stock peaked at $139.19. Of course, trading a sidewinder from a monthly chart can be extremely profitable, as long as each leg has sufficient magnitude.
My rules for monthly charts work like this:
- A close above the 12-month simple moving average is an entry signal.
- A close below is an exit signal.
- Calculate percentage change from entry month close to exit month close (although in practice, the price will differ somewhat, since no one ever hits the close exactly).
OK. The credit bubble burst. Housing, burst. Shockwaves reverberated. Markets collapsed. What lies ahead as we remerge from the wreckage.
Disclaimer
Tim Bovee, Private Trader tracks the trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.
No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.
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