|I bought RNN yesterday at $1.01.
Here is the chart:
RNN had a great run up after a long base. It increased from $0.40 to $1.80 in a month's time. This is definitely a stock on the move. These are the types of stocks I look for. I missed the initial run...actually, it was the initial run that got my attention...but, NEVER NEVER NEVER buy a running stock. Some fool bought it at $1.80. Don't let that be you! :-(
If you had bought at $1.80, you would be in a lot of pain watching your stock drop by over 40%. Instead, take notice of these stocks on the move and then be PATIENT. You will get an opportunity to purchase at a lower price and with a much better risk/reward position.
Watch for stocks like this to drop down to the 13 period Moving Average, or the 26 period Moving Average, or the 50 period Moving Average. Then you are buying them at a good VALUE. Consider these moving averages as Value and never purchase a stock that is too far above these lines. You can consider the 13 period Moving Average as a good value, the 26 MA as a better value, and the 50 MA as the best value.
As the stock drops, you have to see what happens at each of these in order to make your purchase decision. If a stock crosses it's 13 MA without bouncing, then you can assume it will continue down near to its 26 MA, and so forth. Notice in this case, the stock "hugged" its 13 MA and moved sideways (no longer down). I saw the stock's activity start to pick up yesterday, so I bought at $1.01, thinking that I was buying at good value since the stock was probably not going to drop to the 26 MA. Today is a pleasant surprise...I am up about 17%.
These are the opportunities you look for. Also notice the volume increase and the uptick in the MACD histogram and the RSI.
If a stock only drops to its 13 MA and then starts back up, it means that it still has a lot of "power" left in its move. The deeper a pullback is, is an important indication of the strength the stock still has in store for the next upswing.
So what am I thinking on this trade? I am thinking that it may have the strength to get past the prior high of $1.80 and continue its uptrend. I think I am in a good spot for this ride. :-)
Let's see what happens... time will tell.