UCBH Holdings, Inc. (UCBH) is a bank holding company, that conducts its principal business through its wholly owned banking subsidiary, United Commercial Bank (UCB), which makes up substantially all of its consolidated assets and revenues.
UCBH has been in a long downtrend. We do not have a tested MACD crossing after its most recent low of .9211 on September 9, 2009, however it is over extended past its 62% Fibonacci retracement level from its August 10, 2009 high of 1.79 and approaching a test of its July 22, 2009 low of .83.
Aggressive traders may want to start a position here at .93 a 62% retracement of its move off the traded low of .9211 from .98, with tight sell stop price of .91. The stock could trade higher to 1.05 and 1.13 if this sell stop holds.
The alternative to this strategy would be to wait for a test of the MACD cross within your trading time frame. If the stock price is not violated with an equal test of the MACD level a more substantial reversal of price motion can be anticipated.
A few thoughts on such a speculative stock move. If you choose to go speculative long on this or any stock. This would be purely gambling not trading. Although a speculative stock should never be sold by definition, in essence your willing to loose all your “investment”, I still would not hold this particular stock below .83. That price swing alone is enough of a loss to make you think twice about speculation and take your money back.
There is no reason to give money away to the markets. Your risk tolerance is unique to your own trading strategy. However, I am willing to give up no money, or close to zero, adjusted for fees and commissions for a trade headed in the wrong direction. If you are trading to get lucky you will almost always loose. Trade the price, not the stock, and you will find luck has nothing to do with it.
The short term trade analysis for UCBH is being tracked in its trading alerts page.