Slope of Hope Blog Posts

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Stock-Picking Contest Winners (by Biffermas)

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What a week to start a stock-picking contest!  A holiday-shortened week turned nasty for the general markets, with the largest weekly drop since last March.  Amazing!  The entries that performed well seemed to have a common theme: they were short positions built around irrational euphoric rises last week.  Sell the news paid the bills.

The contest rules were structured to be fair above all else, so hopefully I achieved this.  Forcing everybody to buy the open Tuesday and close positions Friday was rather cruel, I admit.  Since many penny stocks were selected along with the big cap names I broke the contest into two components: stocks that trade above $5, and stocks that trade below $5. 

If people are interested in playing again, please submit an entry by Sunday evening to this post.  I'm tweaking the category values to above $10, and below $10.  For the sake of collaboration / education, I've asked each to provide a chart and short description of their rationale for the trade.  I'll pass out the 50 "likes" today to each winner.  Maybe that cruddy old LikeMobile will join in the fun if Gil didn't drive him off permanently!

Large cap category: winner is Katzo with his FSLR short, which dropped 8.7%.  Way to go, Katz!

FSLR is one that can really move. It hit its high of 145 on 12/16 (60 min.), then went into a series of two EW ABC moves. This is an indecisive circumstance and one does not want to be trapped in, it basically goes nowhere and ties up your capital. The last EW C ended on 1/07 at a high of 142.46. Notice that this is not much of a decline from the 12/16 high. The unfolding of a perfect EW 1-3 pattern to the downside subsequent to that caught my eye. As I have said, it is all about trusting perfect form over noise. That was the one thing Ralph Elliott left with us. A stock's move can be equated roughly 50% to the underlying market moves, that definitely helped. An EW5 move down in alignment with the market's impulsive move down, what can go wrong. But note the flat preceding the major move (12/16 to 1/07), a cause for concern on my part.

Penny stock category: winner is Cnairn with his NWCI short, which dropped 27.8%.  Smoking job, Chris!

I am pleased that this stock declined by just under 28% in four trading days. It was just as possible for it to go up by as much. Not because it would have been justified but because markets do stupid things quite often. This stock has clearly caught the attention of medical device investors, ( me) illegal inside traders and gamblers alike. The company issued some news that seemed to be very positive. They announced that they were awarded a patent for one of their inventions. The stock moved up tremendously on this news but seemed overblown to me. The reason being, it was just that, an invention, an idea. They have three ideas(inventions) total and they seem to be good ones. They have a handful of smart people, presumably very smart people. These smart people are not selling there good ideas as of yet so cash is only going out and not coming in. $47 million was the market cap at the end of last week. They do have about $2.6 million in cash and no debt so this brings the total purchase price to $44.4 million. That seemed fairly pricey for a handful of smart people with three ideas in these poor economic times to me.

Looking at the chart, I realized that we were quickly approaching the 38.2% retracement level from the all time high to the all time low.  Incidentally, that was were it topped on Tuesday. Although the volume was confirming the tremendous rise, it was very overbought. Suspecting that speculative stocks and especially high-flying speculative stocks wouldn't fair well this week I felt this was a good short candidate for entry into Biff's contest. 

Penny stock category: Toad with his PFSW short, which dropped 27.1%.  Given that Toad finished so close to Cnairn, and that his short dropped 27.1% in four days(!), I want them both included on the victory stand.  Nice work Toad!


When I saw that Biff was holding this contest, the first thing I did was to go to and look for the stocks that had the biggest gains that day (being a bear, I obviously had to find a good short). PFSW was up a whopping 116% that day! So, I pulled up a chart and put my newbee chart skills (inspired by Joey8888) to work.  I quickly drew in the nice trend line that started at the pivot high in mid 2005 (#1 on the chart.) Then I looked for decent nearby horizontal resistance (once acted as nice support) and found it (#2). Last but not least there was that beautiful pierce of the 200dma that often acts as resistance or support if it hasn't been touched in a while (#3). All 3 of these things met right at that Friday's closing price! Monday's pop past this resistance level was just for the pros to take the amateurs money. They all piled in thinking it was a legitimate break out. Fib levels (not shown) gave me an idea of where a nice pull back target would be. If I had shorted this (I didn't, dumb, I know), I would have given all of the proceeds to Nathaniel Goodwin's Fiero Savings Fund. 

Thanks to Biff for putting this on! Please give the "points" I won to Joe8888 for inspiring me to be the best chartist I possible can be!

Here are some other great picks that should be mentioned, since each could easily have won:


















Biffermas (weekly bulltard)



Weasel Whisperer