RVBD Riverbed Technologies
April 25, 2007
RVBD might possibly be good earnings trade. I took a small position pre market and will watch it to add to it.
RVBD had 340% EPS growth and 212% sales growth. Plus its earnings were 140% above estimate. The price coming in to earning was going nowhere.
Pradeep, i got stopped out at 31.32, you still in ? thanks Mark
ReplyDeletenice chart, to boot, on RVBD... re: trend lines, etc
ReplyDeletevol good too, for 10am
ReplyDeleteYes. I added to build my position to where I wanted it to be on the weakness. Why 31.32? Stops on such trades are 2 days low. Stop is 27.85. I will add to trade if it ends at top of range today. Or will add in few days.
ReplyDelete1 % risk for me Pradeep, looks like she came back , one day i hope to learn , thanks
ReplyDeleteYour concept of 1% risk might be wrong.
ReplyDeleteStop is 27.85
Your start capital let us assume 100000
Your entry is say 32.25 so what will be your position.
1% of 100000 is 1000
1000/(32.25-27.85)=227.27
So you buy 227 shares at 32.25. Total invested= 227*32.25= 7320.75
If you get stopped out at 27.85. You will have loss of 1000 approximately due to rounding.
27.85*227=6321.95
7320.75-6321.95=999
pradeeb, as a rule, is it always the low of 2 days previous? what do you mean by "such trades"? breakout trades?
ReplyDeletethanks
I only have 10 k account , I bought 100 32.32 , 1 % loss is roughly 100 , so i put stop at 31.32 , i should have only bought 27 shares and let it ride to 27.85 2 day low , thanks , Mark
ReplyDeleteIn everything I use low of 2 days previous to breakout day as stop. The logic is if breakout works, it never goes below the 3 days or it is not worth holding on to such breakout. My tests on earnings/ IBD200/100 plus show that the successful trades never go below the 3 day low.
ReplyDeletegreat! - i trust your research.
ReplyDeletedamn, we missed multiple breakouts on OSG...
ReplyDeletementioned last week or something...
regarding 3 day low for breakouts, do you think the same 3 day rule can be applied in reverse for breakdowns?
ReplyDeleteThe 3 day rule is vehicle selection specific. It works on my set of stocks because they have been preselected based on some critria.
ReplyDeleteOn the short side the dynamics of moves are very different. Most short moves will have more retest of breakdown. At least that is what my research shows, so you need very wide stops for shorts.
Pradeep, what stocks are you in right now besides rvbd ? What do you think of nga from ibd ? From out of nowhere to # 6 on idb 200 , this is only my second week of tracking this list , but it looks good , thanks Mark
ReplyDeleteI trade a bunch of accounts, so different accounts have different stocks.
ReplyDeleteNGA was probably a good buy 10 days ago when it appeared in 100% plus breakout list. It is up around 30 % plus since then.
monitor AMZN for breakout play?
ReplyDeletewow, and a river runs through it !! nice Pradeep.
ReplyDeleteAMZN
ReplyDeleteNo. It will go down most probably from here. 309 million float.
Stocks has doubled from July low. The move today is probably a climax for that move.
It might be a good short.
IMHO
did FPIC show up on any of your breakout scans?
ReplyDeleteFPIC today. No as of 11 A.M.
ReplyDeletesorry, i meant as in the last week or so...
ReplyDeleteno big deal. had nice breakout, and pulled back some...
Yes. It had 4% plus breakout in last 10 days and one even before that.
ReplyDeletePradeep,
ReplyDeleteThanks for shedding light on how to trade stock. I haven't traded yet but having read your blog am pretty sure your concepts must be right. The RVBD (which i not yet buy to take the profit yet)is just one of the proof of the pudding.
Thanks again and God bless you.
hi pradeep,
ReplyDeleteWhy would you recommend RVBD but not AMZN. AMZN has been in consolidation for the past half year. it broke up with more than 4% in price and high volumn, same as RVBD. AMZN even broke out of multi-year high. So why you think AMZN would be going down and RVBD would be a up? Just want to learn how you analysed this. thank you
RVBD 65 days growth coming in to earnings= 7%
ReplyDeleteAMZN= 22%
Plus AMZN has 300 million plus shares, heavily owned by institutions. This is second gap up in 100% plus move from 260 days low.
RVBD is growing faster, lower float, lower instituional holding, greater earnings plus sales growth plus significant 100% plus earnings surprise compared to analyst estimates.
I will be very surprised if AMZN makes much headway beyond todays gap up. Once the short squeeze is over , it will head down.
That is my judgment based on years of trading earnings. I can be wrong but I am willing to bet few bucks that this level would provide good short opportunity on AMZN.
Large caps and heavily owned by institution stocks are best bought on weakness.
Third gap up not second.
ReplyDeletethanks pradeep. When you say "65 days growth coming in to earnings", do you mean the diff between the gap? coz i calculated the low of RVBD in 65 days is about 26, high is 34.5, growth is 45%
ReplyDeletefor amzn, would you have bought this in the 1st, or even 2nd gap up?
You should take 65 days growth till yesterday.
ReplyDeleteRVBD 65 day low= 26.45
RVBD yesterday close = 28.28
Probably first gap up. Or even before that on 4% plus move around 28.
interesting. thanks pradeep.
ReplyDeletenice call dude :-)
ReplyDelete