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Buying at the close

Recs

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August 17, 2010 – Comments (3)

So this is something that has worked for me...its probably not that reliable, and theres not much to it, and theres not much science to it, but it seems to work best for me.

Whenever I see a company drop on news and I consider it an overreaction and the fundamentals dont change too much and the oscillators say oversold, I pick up the stock for a cheap bounce.

However if I buy it in the middle of the day, even if it is trading at the current low for the day, it usually winds up dropping even more by the close, and the bounce I get the next morning gets me just past break even.

Usually, when I expect a dead cat bounce / regular bounce the next day from an overreaction, it happens.  But if I buy at the close, I am not subject to more selling off on the same day.  Overnight is when people have more time to be rational, and bottom feeders to sort through more data.  Intraday is when analyst rankings change and computers pick up on the downtrend and force it down more.

So if you want a bounce, buy it at the close and sell it at the open. Just my quick 2 cents.

3 Comments – Post Your Own

#1) On August 17, 2010 at 1:24 AM, ChrisGraley (29.74) wrote:

I've never looked at it in that short of a time frame, but I do usually find success buying a stock that I think was oversold on news 3 days later and selling a stock that I already owned, if I thought it was overbought 5-7 days later depending on what day of the week it was.

Monday, Tuesday, and Friday stocks usually make me wait 7 days and Wednesday and Thursday stocks make me wait 5 days.

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#2) On August 17, 2010 at 1:56 AM, Valyooo (99.43) wrote:

Cool, what is the logic for the 5-7 day thing?

Also, what I like to do for oversold stocks, I know its a little silly....

If I see a stock is oversold under the 20 line on the oscillator, I wait one more day...just to be extra conservative... If it is still down the next day, and I think it is a huge overreaction, and it is technically oversold, then I go to caps and if a lot of top fools have green thumbed it, or soembody has provided an excellent pitch, THEN I buy it at the close.

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#3) On August 17, 2010 at 2:50 AM, ChrisGraley (29.74) wrote:

There is no logic on the last post. Just observation.

I'm not even sure how accurate it is.

It just seems to work for me. 

 

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