tristan.rhodes
Long

Experiment: How far do falling knives and dead cats bounce?

NYSE:BTU   PEABODY ENERGY CORP
19 4 0
This is an experiment to see if we can make money on a stock with horrible fundamentals ( BTU             just got downgraded), and the stock had fallen 98% over several years.

This stock has been accelerating it's decline since 2011. I gave each declining tops line a different color. You can see the slope of lines has gotten steeper with time (blue, yellow orange, red, maroon).

However, it appears that the stock has finally broken this pattern and may have established an upward channel. I have outlined this channel in green. Is this an indication that stock owners have capitulated and oversold this stock?

With the horrible fundamentals, I don't expect a long term trend to take hold. I am just wondering how far of a retracement we might see in the short term. At a minimum, I think we could see this bounce up between the 50% and 61.8% levels, which is where it would hit the longer term yellow tops-line.

The ideal long entry would be after a small dip back to the bottom of the green channel, with a very close stop right below the green line.
tristan.rhodes
a year ago
Looks like the stock went up another 5%, but it did close within the channel. I am still waiting for a bounce back on the bottom of the channel before entering long.
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tristan.rhodes tristan.rhodes
a year ago
Well, no bounce back to the bottom of the channel. Instead, this made a new high, hugging the top of the channel. I am still waiting for a retracement and bounce to go long.
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tristan.rhodes tristan.rhodes
a year ago
Now we have had a retracement back to the middle of the channel, but I still want to wait. I also want to see a bounce up from the green-line to confirm the uptrend and channel.
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tristan.rhodes tristan.rhodes
a year ago
This stock has appeared to consolidate and the rising channel is getting close to the current price. I am entering LONG with a stop-loss at 1.93 and a target right below the next resistance line (yellow) at 3.34. This has a risk/reward of 8.4

snapshot
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