I have a friend who trades off downgrades. I have been testing his trade and thus far have concluded that trading on a downgrade is good IF there is volume in the stock, IF the charts agree with the downgrade and IF the firm giving the downgrade is well known.
Yesterday I traded NKE on a downgrade from Citigroup. The charts confirmed the downgrade when NKE opened with a gap on the 55. I love to trade gaps. So I decided I would get into NKE and IF at the close of the day it looked like the trade was going against me I would get out. I got in the trade about 1:45 and remained in over night. NKE did go up a little and began falling about 30 to 35 minutes after I entered the trade. I should have followed a little closer to the 5 chart than the 8 but....I sold this morning with a 21.9% profit.
BTW I am getting impressed with LNKD...if you do not have it in your basket try it and watch. I bought 200 shares of LNKD virtual and thus far I am up over 2 grand. I am getting ready to do a (Gary) Printing Press trade with it. I'd like to see this stock added to RTT.
Doing the Printing Press is my goal....
Edited 2 time(s). Last edit at 09/14/2012 10:02AM by Darcy.
