A Look at JOYG (09 Aug 06)
I generally stay away from taking requests for charts. It would look too much like I thought I could take a random chart and divine something about the future from it. “This stock is definitely headed up.” Or down. Or whatever.
If I (or anyone) could do that, we’d have Bill Gates taking out our trash.
Crystal-ball predictions are the domain of someone who’s either trying to sell you something, who is desperately seeking to reinforce his own belief, or who is just plain full of crap.
What you can tell from charts, if you’ve spent some years and bled some hard-earned money trading, is when you see a low-risk entry in the direction of the prevailing trend, and how much of a loss you stand to take if you’re wrong.
That’s quite different than trying to guess the future, then betting your money on that guess. We’ve all been through that stage, and eventually, hopefully, come out of it prior to complete bankruptcy.
One of my close friends asked today what I thought of JOYG. I recognized the ticker - I’ve daytraded that one once or twice. So, let’s give it a look.
First, a daily chart of JOYG. I’ve linked it to a larger version so you can click and view that one.
I’m guessing anyone who bought this thing in April will now tell you they’re a “long-term investor.” That’s usually code for “losing money.” I can’t see anything tradable on here, for me. For me. For me.
These bars are really noisy, often ranging from $2 to $5 in a single day. Nearly impossible to find an entry point, long or short, where you could set a sufficiently tight stop given the intraday volatility. But that gives me another idea. Let’s look at a different time frame.
Here’s a chart from the last two days, from the trusty Ameritrade Screamer, er, Streamer. Again, click for a larger version.
Ah, look at those pretty 10-minute bars! Nice smooth swings. Trends 50 cents to two dollars wide in a matter of hours. Intraday is the time frame for this stock. I would, and I will, follow JOYG on 5-15 minute bars, watching the price action and volume for signs of a low-risk entry. Preferably a dummy spot, of course.
I’d tell my friend that picking up $500 in 1 hour from a good entry with a nice tight stop is something I’d declare plausible if JOYG continues this volatile pattern.
As for swing-trading this one (daily bars), I got nuthin’ fer ya. Sorry. 
Cheers.