Tuesday, January 8, 2008

The Etrade Bounce Trade

EtadeEtrade was down another 20% today.  This stock is ugly.  I got out of it not too long ago, cutting my already significant losses.  But, if I could watch this stock like a hawk tomorrow, I would consider trying to buy up a few shares and then day trade it.  I still think it will sink down to around $2, but at some point very soon, the shorts are going to cover and you should be able to eek out a 5% gain or so.  Again, you would have to have a very tight stop-loss on this stock, because it still has a ways down.  That said, I won't do this.  I don't have the time nor inclination to day trade.  But it will be interesting tomorrow to check out the chart and see if it does indeed bounce.

For all other people thinking about getting in now and trying to pick a bottom, FORGET IT.  Do not go long this stock.  I promise you, it will go down more from here.  I honestly think this sell off is overdone, and that Etrade is worth more than this, just for the fact it still has quite a few customers (myself included).  If you have money that can sit dead for about two years, and don't mind waiting it out, than maybe just maybe you can get in.  For everyone else, the risk of bankruptcy probably doesn't outweigh the potential gains.  Don't fight the stock at this point.

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