A Trader’s Guide: How to short NCTY , “the9 City.”

Here we go… first I’ll start off with a July winner.  Don’t worry, I’ll get to the losers soon, which many people tell me they learn more from.  (You’re all sick!  Lol.)

Shorting NCTY was a timing play.  I used technicals to measure sentiment, if you know what I mean.  Hmmm, in other words, the way I read a stock’s pattern is price vs volume, and trying to decipher what the chart is trying to tell me.  NCTY has a strong downtrend which is the first thing you should look for in shorting stocks.  If you’re not sure, try screen through any stock that trades considerably below its 200 day moving average.  I’ve come to the point where I can just look at a stock’s price/volume chart and say, “Aye, this stock looks gross.”

– NCTY has strong institutional selling patterns.   Look at the dumps on volume.
–  For the wave-crowd, I plotted the Fib retracement level, which in this case, works well on the last 3 months.
–  Don’t just use NCTY to determine where to enter and exit the trade… I used industry leader, NTES, which is a more bigger and popular online Chinese company.  They both are in completely or partly in the online gaming industry, which has drawn much attention to aggressive investors.  Hey, that’s a good place to play momentum stocks!  NCTY is a fast stock, so make sure you take profits quick when you start to see volume picking up (ie, the trade is getting crowded).

Anyway, here’s the charts.  These are stored away in my notes…

 1.  Bigger Picture:  NCTY long term.

 2.  The Trade:  NCTY short term

3.  The Help:  Using NTES to predict entry and exit points:

 

 Price vs Volume rules!   And yes, my strategy is telling me that NCTY will be a good short candidate very shortly (no pun intended).  I’ll keep yah posted.

 

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Short NCTY 7/2/2009:  http://ibankcoin.com/gioblog/2009/07/02/trade-ncty-frg-57-drys-19/

Cover NCTY 7/19/2009:  http://ibankcoin.com/gioblog/2009/07/19/trades-and-week-review-covered-ncty-17-sold-anci-14-jaso-18-new-shorts-meli-afam-lulu/

 –  Shorting NCTY on NTES news.

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