Would You Buy This?

Posted by barkand on October 10, 2010 under Uncategorized | Be the First to Comment

To borrow a concept from Investors Business Daily, today we will play “Would You Buy This?”. Today’s contestant has had two rallies in the past four months. Each met its demise shortly after the appearance of a shooting star. After the peak in late August around $19, this particular security lost a quarter of its value over the next month. It made a new low on Friday, though the rate of decline is much, much less than it had been. And while this security made a new low, its RSI did not. So there’s that. Otherwise, there isn’t much reason to like this particular security. Best case is it forms a base here before eventually moving higher. Or the past two weeks were simply a pause in a larger downtrend.

In fact, this is QID, the popular NASDAQ double-short ETF. It is true that tops do not behave exactly the opposite of bottoms. But sometimes it is useful to turn the charts upside down and take a look at things from a different perspective.