PPR - Pocket Pivots in Real-Time: Taomee Holdings (TAOM)

Published : July 13 2011 at 11:59 ET
Taomee Holdings (TAOM), a Chinese online game maker that makes "visual worlds" for young children ages 5-15, is staging a continuation pocket pivot off of its 10-day moving average. This is a small $12 stock extended some 20% from its 10-day moving average, but it could be played with a smaller position accounting for the increased risk. Thus one might allocate 5% of their portfolio capital to it, and any 20% pullback would result in a 1% portfolio loss, roughly, if the stock violated the 10-dma. If your anatomy is somewhat larger, and your risk tolerance scaled accordingly, then one could calculate risk on 10%, 20%, etc. sized positions...

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