Learning from a Loss #CEI
Updated
So I got into this stock in a stupid place. I'm taking the opportunity to learn and hopefully this helps other people.
I knew beforehand NOT to enter during a sudden jump and did anyway. As quickly as it comes up, it can come down.
Mistakes aside. It's a learning experience. I have a light idea of what CEI will do next by noticing what it did before the jump.
My expectations are not another jump to $9. Rather, my expectations are a drop first. If you look at the yellow circled area you will notice two things:
A) It almost looks like little tiny Shooting Star Candlesticks. The wick is small, which to me means either indecision with buy/sell or a dropdown. If the wicks were really long like a traditional Shooting Star it's almost a bet it goes down.
B) The second note is it was the END of DAY. On the Market Open, a gap down to the lower price. If you look at 7/16/2019 on my chart you can see the exact same pattern as before the spike. The Stoch-RSI is bottomed out like before the spike. This is telling me it will gap down down July 16 into 17, 2019.
Recovering losses: Hypothetically let's say you entered at $7. Knowing this gap is about to happen you can save yourself at least some loss by not selling at a lower price when it gaps down. Rather, it would be much better to see if it will swing back up and gain some (probably not all) of the price. I've drawn a yellow line at $5 ad given a POSSIBLE movement of the Stoch-RSI as well as a POSSIBLE path the stock will take over the next few days. Should it recover to $5 you minimize your loss.
You could sell and just take the hit. Or you could ride it out. The problem with riding it out is the chance the pattern repeats and gaps down the following day making your loss worse. I would set a limit on acceptable loss. $1.92 would be a huge loss if it went to the previous low. Let's say at $3 I set my limit. Yours may be different (this is all hypothetical). If it hits my $3 and swings back up to $5 over the following days I can handle that.
This is all a learning experience for me (and us) so hopefully this helps someone using my own experience with this stock.
THIS IS NOT TRADING ADVICE: Just an example of what I've done: (As a side note my numbers were way different and losses were already taken and I've moved on.)
I knew beforehand NOT to enter during a sudden jump and did anyway. As quickly as it comes up, it can come down.
Mistakes aside. It's a learning experience. I have a light idea of what CEI will do next by noticing what it did before the jump.
My expectations are not another jump to $9. Rather, my expectations are a drop first. If you look at the yellow circled area you will notice two things:
A) It almost looks like little tiny Shooting Star Candlesticks. The wick is small, which to me means either indecision with buy/sell or a dropdown. If the wicks were really long like a traditional Shooting Star it's almost a bet it goes down.
B) The second note is it was the END of DAY. On the Market Open, a gap down to the lower price. If you look at 7/16/2019 on my chart you can see the exact same pattern as before the spike. The Stoch-RSI is bottomed out like before the spike. This is telling me it will gap down down July 16 into 17, 2019.
Recovering losses: Hypothetically let's say you entered at $7. Knowing this gap is about to happen you can save yourself at least some loss by not selling at a lower price when it gaps down. Rather, it would be much better to see if it will swing back up and gain some (probably not all) of the price. I've drawn a yellow line at $5 ad given a POSSIBLE movement of the Stoch-RSI as well as a POSSIBLE path the stock will take over the next few days. Should it recover to $5 you minimize your loss.
You could sell and just take the hit. Or you could ride it out. The problem with riding it out is the chance the pattern repeats and gaps down the following day making your loss worse. I would set a limit on acceptable loss. $1.92 would be a huge loss if it went to the previous low. Let's say at $3 I set my limit. Yours may be different (this is all hypothetical). If it hits my $3 and swings back up to $5 over the following days I can handle that.
This is all a learning experience for me (and us) so hopefully this helps someone using my own experience with this stock.
THIS IS NOT TRADING ADVICE: Just an example of what I've done: (As a side note my numbers were way different and losses were already taken and I've moved on.)
Note
If you're wondering where the $5 line comes from as a "bounce" look at the wick/candlestick right after the big dump.Note
And as expected a drop down to the 3.12 area on 7/17. Only thing to hope for here is that the stock swings back in our favor reducing our loses.Note
At EOD we can see the stock moved precisely where we expected. A drop down and slow descent. My arrows weren't meant to be accurate, but it did follow the first arrow almost perfectly. Our next hope is that the stock price levels out and begins to ascend towards our exit point. If it trends for more than a week at current price with no volume change, I would just cut my losses. It could be months before you can exit.
Note
Looks like we might bottom out again. Ooof!Note
Set a 52-Week low. 4 Splits in 5 years is interesting. With Natural Gas struggling, I am not sure what to expect. Hard to guess and don't want to assume. Possibly might dip lower, though.
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