Ian Woodward's Investing Blog

A Case Study of the Machine-General Index and RBN

Mail-Bag Question: Ian, RBN is doing extremely well in this correction. Since it’s now extended what would you need to see in order to consider it a safe buy? Best Regards, Paul

rbn

Paul:  There is no “safe” time in this market.  You have picked one of the leaders in the Machine General Group which you identified as moving several days ago.

  1. If you were a Type 1 or Type 2 trader (moment or day trader), you would have pounced then.  Since you are not, and are more a Type 3 and mainly a Type 4 investor, you should stay in your fox hole.

  2. For the very short term, if you want to dabble, you are getting your second chance today…but wait, RBN is correcting back into the base having made a BRAND NEW High.   

  3. The Group is “HOT” once again and rising as a WOLFPACK against the grain. You should watch the Group Movement first and then the individual Stocks.  Today, the group is taking a breather, having been up several days in a row, so if $51.62 is the low today and the market doesn’t tank, your best chance to get in will be at below $52 for a BOUNCE Play with a tight stop.  But if you do, remember you have changed your stripes to be a Type 1 day or moment trader when you buy.

 index

  • FYI, without a lot of research, FLS, RBN, WGOV, FSYS, BMI and SNHY are the overall leaders, but you will notice that four of those five are all being hit today and FSYS has given up $2 from its follow through day today at $42.42 down to $40.25.  On the other hand, a terribly beaten down stock like GENC is up 18.43%, so you know that was a great bottom fish.

warehouse

  • The bottom line message is “Timing” my friend…and your trump card is “Nimble” with “Tight” Stops.  If you want to “dabble” in this market, you will need to adapt to those three points.  He who hesitates is lost.

  • Lastly, think Wolf Packs first and Stocks within the Wolf pack second, which I am glad to see you are doing. 
  • As I finish writing I see that at 10:47 Pacific Time, RBN has repaired to $52.19 with a bid/ask spread of $52.17 and $52.25, so that speaks well for a possible recovery, particularly if the market is once again on the trot.  If not, all bets are off.

tracker          Net-net…you snooze, you lose.   Best regards, Ian. 

One Response to “A Case Study of the Machine-General Index and RBN”

  1. Paul R Says:

    Ian,

    Excellent lesson, this one goes in the note book, thanks!

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Disclaimer: Commentaries on this Blog are not to be construed as recommendations to buy or sell the market and/or specific securites. The consumer of the information is responsible for their own investment decisions.