Trade #1
Scrip: HCLTECH
Buy Date: 8/14
Buy 18@546
Buy Reason:
1. Recently declared good results had given the stock extra "mileage".
2. All DMAs (5,10,20,50,100,200) in order and expanding.
3. MACD in order.
4. On BB, prices were on the 20 DMA above mean line - not a buy setup but the were prices were sticking to it.
5. 8/14/2012 resistance level suggests that it has potential to 630-650 as was in 3/2006 and 4/2007 if it breaks 560.
Sell Date: 8/22
Sell 18@552
Sell Reason:
1. Watched the stock for 4 trading days - went from 546 to 560 as planned - then hit its head at 560 a couple of times and then started drifting down to as low as 551. Made me believe that 560 is a resistance that it might not overcome.
2. My belief in the dld adage - what must not go up, must go down.
3. My decision is technically challenged - NOTHING in the TA (apart from S&R) suggest till 5/22 that it is on the downward path (apart from the candles sliding below the BB 20 DMA top line and a little bend of the 5 EMA) - Feels like an emotional decision.
Net Result: 25 bucks lost (brokerage let it down even though there is a tiny little profit!!!
)
Have decided to watch the stock - will re-enter if it heads above 560 and stays there without breaking the 560 resistance
Question:
1. What are the loopholes in the above thought process?
2. Should I have given the scrip some more time?