Satuki @ Home

The market keeps moving up.  The most sensible move is to follow it even if you might think it is somewhat “over-valued”.  In trading, the intrinsic value of a stock is not important.  What is important is your timing.  Yes you already have risk control firmly implanted in your head like me.  But if you try to short a strong stock like BIDU, you might suffer a string of small losses which could quickly add up. Therefore, risk control alone is not enough; you need to improve your timing skills.

Here is BIDU’s daily Chart  Would you still like to short it because it has a very high PE? I bet there are many people out there who want to short it now.

Click on the images to have a better view

Here are 2 stocks that I think are interesting.

PCX have broken out of a multi week consolidation range.  I think the shorts should surrender now and the possible longs can start to pay attention to it.  The break-out was a strong and valid one as we can tell from its volume and the way it moved up.

So has CAT.  Take a look at the chart, which is similar to PCX’s. However, CAT is a large cap stock, which requires much more firepower to move up than PCX.  On the flip side, CAT should be less volatile than PCX.  If you do not have the stomach for volatility, add CAT to your watch list.