The trading diary of Paul J. Singh. I trade full-time and empower traders by making the complex simple. I can be contacted at SinghJD1@aol.com
Monday, April 30, 2007
Today's Trade: AAPL and ADM
Sunday, April 29, 2007
OT: George Vecsey's Baseball: A History of America's Favorite Game
I found the chapters on race and the game the most moving. Here is one of my favorite passages:
Saturday, April 28, 2007
How would you play AAPL
The stock was over $100 in after hours when it reported Wednesday night, but failed to hold this major round number Thursday *and* closed at the day's lows. These are not good signs. However, Friday the stock held gap support, which is is a positive for bulls. Breakouts to highs off of a cup and handle formation (which AAPL did) can lead to powerful upswings, which is another positive for this stock.
I might be willing to take a small nibble under $100, but I won't increase position size until we see some more clear signs of strength. If the stock can not hold support, I would expect it to fall back to the 50 day moving average and may initiate a short position.
Friday, April 27, 2007
Answering Questions About Part-Time Trading
I welcome any questions my readers might have. Whether it's about my trading methods, sports, entertainment, something I've talked about, or anything else that you may have on your mind, feel free to leave a comment or email me at SinghJD1@aol.com
Thursday, April 26, 2007
Today's Trade: JSDA and VDSI
I was stopped out of my 400 share position in JSDA at $24.85 (entry at $26.41) for a $624 loss (-5.9%). This may sound crazy, but it actually is somewhat of a relief to take a loss, considering my last losing trade was March 21st, 24 trades ago.
While I've had a good win rate over the past year and a half (when everything started to click for me), I've never enjoyed a run like this. I attribute this run to one part picking the right setups and sectors, one part market conditions, one part improved psychology (most of it being patience and honoring stops) and one part luck.
I may take a few nibles in RIO, INFY, BLUD, TOL, AMZN (short) and CCOI later today.
I am still holding STLD, ZOLT, EWZ, PAAS, FUL and QID.
A Reader's Take on AMZN
I saw your comment on Amzn today, I hit myself for not going in ( just like I passed on STP last friday). However, I think the bullish situation will not continue in the near future. The stock level is too high compare to company's earnings ability. They did posted double than estimated earnings, but most of them came from tax break and not from their actual revenues. Not to discount all the panics from those shorts, they probably are responsible for half of the movements. I wonder where the support will be at this level.
This crazy movement may be an one time thing, and once there is no news to support this level, ths stock price may plundge back to around the 50s or even slightly lower. I rushed into the 47.5 puts a bit too early today, the puts may be at a discount at this moment. Just some of my comments, and thanks for your sharings of opinions on the web
Cheers!
Rich
Wednesday, April 25, 2007
Thinking Out Loud About Amazon
I welcome reader thoughts on AMZN. Are you long or short? You can leave a comment or e-mail at SinghJD1@aol.com
Today's Watchlist and a Breakout-Pullback Candidate
Here is a list of stocks I'm watching today.
Tuesday, April 24, 2007
Today's Trades: ZUMZ, AAPL, VLO, JSDA, STLD, EWZ, ZOLT
I bought 400 shares of STLD at $44.80.
I bought 250 shares of EWZ at $52.78.
I bought 300 shares of ZOLT at $32.30.
I will go into more detail about these trades tonight.
I sold 500 shares of ZUMZ at $40.75 (entry at $38.83) for a $960 gain (5.0%). I no longer see the stock as a pullback play, but would buy a breakout over $42.
Monday, April 23, 2007
Today's Trade: PAAS
Sunday, April 22, 2007
Metals and Shorts Watchlist
Metals:
Shorts:
Friday, April 20, 2007
Breakout Chart: XOM
While the breakout is bullish, there are some concerns for this stock. Notice the negative divergences in both RSI and stochastics. One would expect new highs in RSI and stochastics when price hits new highs, but here the two indicators are trending down. While this is not bullish, I would not short until confirmation of the divergence. If price pulls back below the old high, we might see a quick short opportunity.
Playing armchair quarterback, it's easy to see a missed opportunity for entry at $76. Here we had atextbook breakout from a "W" bottom formation.
Thursday, April 19, 2007
ZUMZ Bullish Englulfing Pattern, Steel, Energy and the UFC
Conservative traders would argue that yesterday's entry was risky. The safe way to have played ZUMZ would have been to place the stock on your watchlist as it moved to support, and entered only after they type of bullish confirmation signal we received today.
Steel and Energy stocks are high priorities on my watchlist. The two sectors are finally pulling back, albeit after parabolic moves up. STLD, RIO, PDE, VLO, HOC, MT, XTO and DNR are a few of my favorites right now. I've also added two new stocks to the breakout-pullback watchlist.
Off-Topic:
As many of you already know, I am a huge UFC and boxing fan. Saturday night, UFC is showing a good match-up free on SpikeTV. Mirko Cro-Cop against Gabriel Gonzaga. Mirko is known to unleash some of the most lethal kicks in mixed martial arts. Check out the teaser:
Breakout-Pullback Charts: BA and AMZN
- Price breaks out over established resistance on above average volume
- Stock closes near the high of the day, printing a long range bar
- Evidence of accumulation prior to breakout
- RSI is at a higher level than when at previous high
- Stochastics printing higher lows previous to breakout
Both stocks fit the breakout critieria. All that is left is a low volume pullback to the breakout point. I'd like to enter Amazon around $44 and Boeing at $92.
Today's Trade: GROW
Wednesday, April 18, 2007
Today's Trade: ZUMZ
Tuesday, April 17, 2007
Today's Trades: TZOO, GROW, MVIS, FUL, VLO
The stock is again setup as a breakout-pullback, and I may buy on a pullback to $38-39.
I sold 300 shares of GROW at $32.55 (entry at $29.96) for a $777 gain (+8.6%). Here, I traded the post double bottom breakout range, which is approximately $28-33. I might be willing to buy another pullback. GROW is a volatile, and fun, stock to trade.
I sold 1000 shares of MVIS at an average price of $4.60 (entry at $4.04) for a $560 (13.9%) gain. Here is another breakout-pullback play. I bought on a pullback to the breakout at $4.00, and sold the following breakout. Note that I did not sell on the day of the next breakout because the stock was not yet extremely oversold. It hit that level today.
I bought 500 shares of FUL at $27.22. This is a breakout-pullback entry. The stock seems to be holding nicely at the breakout-support level. My initial target is $29.
I bought 300 shares of VLO at $66.48. This is a bit of a risky play, thus the smaller than normal position size. The stock has made a parabolic run and now has pulled back to a short term support level. However, the size of the run makes me think there might be a deeper pullback. My stop will be placed at $63, which is just under the late May consolidation range.
A lot of stocks on my watchlist have been acting as I had hoped they would, but I've been slow to pull the trigger on a few (DGIT, BWLD, SON, JSDA, EWZ, CCOI). I'm going to have to figure out why I held back and pick up my game.
Sunday, April 15, 2007
Watchlist and Entry Point Question and Answer
Other stocks on the watchlist:
BWLD: buyoint: $62.64, stop $61.75
DGIT: breakout $17.50, pb $16
FUL: $27-27.50, stop $26.30
OEH: buypoint $54-56,stop $53.25
I've had a few questions about the wide range of some of my buypoints. For example, OEH has a $54-56 range. First, remember that I am swing trading these stocks, not daytrading. I don't require precise entry points. My target for the stock is $62, so even if I enter at $56, my reward-to-risk will be more than 2:1. I like to allow myself some leeway when dealing with momentum stocks that have fallen more than a few points to support, in order to get a good feel for how the stock is acting in this range.
Saturday, April 14, 2007
What I'm Reading
Steve Nison is considered the candlestick guru. However, I have yet to read one of his books. Everything I know about candles I've learned from online sources and my own research. I had no plans to read the Pring book, but a friend of mine had recommended it and I'm a pattern addict. Hopefully it will be a good supplement to the Bulkowski chart pattern books.
I'll let you guys know how the books read in a couple of weeks.
Friday, April 13, 2007
Friday's Additions to Watchlist and Quote of the Day
Here are some new additions to the watchlist with notes:
HCR: pb 60 (breakout-pullback setup)
JASO: pb 20-21 (b-o setup)
WOOF: pb 39
CSX: pb 42-42.50 (thanks to Buffet and takeover speculation)
MEDI: pb 41-42 (bo-pb)
RRD: pb 38.50-39
AAPL: hammer confirmation?
CCOI: pb 25 (bo-pb)
SU: bo 82
GROW: multiple entries
CCJ: just watch for now (need deeper pb or bo)
Quote of the day:
I had to fight back from being seventh on the depth chart. My mother and father brought me along and taught me to never quit, and to strive to be the best.
--Joe Montana, greatest NFL QB of all-time
When Joe Montana entered as a freshman at Notre Dame, he was seventh on the depth chart. He ended up their QB and lead them to one of the greatest Bowl game comebacks of all-time. After college, he was drafted in the 3rd round of the NFL draft, with 81 players taken ahead of him. Montana ended up leading the Niners to multiple Super Bowl victories. It's not hard to see why I am such a big Joe Montana fan.
Main Page
Today's Trades: HES, VDSI and AAPL
I bought 200 shares AAPL at $$91.05. I had been looking to see how AAPL would handle a pullback to the peak of the double bottom formation it recently broke out from. The hammer that printed today is a strong sign that the stock will bounce here. I bought on the move up after touching the resistance line.
I bought 500 shares of VDSI at $17.63. During it's uptrend, the stock has rewarded pullback entries, especially on tests of the 50 day moving average. Yesterday's long tailed hammer looks to have been another successful test. Also note that stochastics are turning up and volume shows increased accumulation since the February breakout. These are all strong momentum signs.
I am still holding TZOO, QID and GROW.
Thursday, April 12, 2007
"Pump Up" Books
Once I find something that I am passionate about, I tend to relentlessly pursue that endeavor. My closest friends and family would say I do so to the point of obsession. While some may see this as a negative, I see it as a positive. It's the only way I know to achieve excellence.
However, there are some negatives to the "full tilt" pursuit of expertise. The most obvious side effect is burnout. In the past, when I'd feel burnout setting in, I would completely step away from what I was doing. However, when I came back, I wouldn't feel much different when I came back.
I've learned to take a different tactic when I'm burned out. I take only one day off, and spend that day fully immersed in the subject. I know it sounds crazy. Here's the rub; I immerse myself in "pump me up" activities. For example, when I'm tired of lifting weights, I watch "Pumping Iron" the bodybuilding classic that documents the rivalry between Arnold and Lou Ferrigno. If my tennis game is lagging, I go to my collection of classic matches. One of my favorites is the 1980 U.S. Open final between McEnroe and Borg.
When I've overdone it as a trader, and I cannot bear to look at another chart, I take a day off and spend it reading trading books. However, I am not reading trading "texts", such as Alan Farley's "Master Swing Trader." Trader biographies, interviews and profiles are what I use as "pump up" tools. Here are a few books that do the trick for me:
Market Wizards: Interviews with Top Traders
Jesse Livermore: The World's Greatest Stock Trader
Pit Bull: Lessons from Wall Street's Champion Day Trader
Confessions of a Street Addict
One of my new "pump up" books is Entries & Exits : Visits to 16 Trading Rooms (Wiley Trading) by Alexander Elder. The author interviews sixteen traders and not only asks them questions, but actually analyzes how they trade. Each traders gives some background on how and what they trade, and then open the vaults to their past trades, detailing the setup, entry and exit. It's sort of like reading somebody else's diary, with an added critique from Elder. This book takes the idea of "Market Wizards" and pushes it to another level.
I read this book for the second time this past weekend. Not only did it rejuvenate me as a trader, I gained some nuggets of wisdom that I will likely apply to my current methods. I highly recommend this book to anybody with even the slightest interest in trading.
Wednesday, April 11, 2007
Thursday's Watchlist
Today's Trades: GROW, MVIS, QID, EWZ, HOKU
I bought 1000 shares of MVIS at $4.04. This one is straight out of last night's watchlist notes. I like the low volume pullback to the previous highs. What's tricky here is stop placement. Should I use a tight stop at the previous highs ($3.95), at the high volume breakout (3.8) or the 50 day moving average ($3.50)? I'll probably go with $3.80. I move back down to the moving average would put the stock back in an ugly trading range, and I ain't got that kinda time.
I bought 300 shares of GROW at $29.96. Last night I wrote that I was waiting for a deeper pullback, but decided to enter on a test of gap/breakout support. This stock is extremely volatile, and there is another support area at $28, so I decided to use a wide stop. To make up for the stop, I went with a smaller than normal position size.
Along with the positions I entered today, I am also holding TZOO and HES.
Wednesday Watchlist
XOM: pb 76
CVX: pb 76
HES: pb 54-54.50
RIG: bo 84 or pb 80
VLO: bo 70
PXD: pb 44-45
HOKU: bpt 5.90-6.15
MVIS: pb 3.80-4.10
OSIR: 17-17.50
TZOO: 36-36.50
ALXN: bo 45
EWZ: pb 48-50
FUL: pb 26.60-27.10
GES: pb 40-41
CCOI: now
CP: pb 56-57
OEH: now
NCTY: 38-39.50
FCX: short at R --> risky
RIO: pb 38
STLD: pb pb 40-41, 50 day MA
EMR: bpt 42-42.20, bottom channel support
MWA: bpt 13.50-13.75, bottom channel support
WFR: now, 60-60.70
Stocks needing deeper pullbacks (at least 2 points):
BWLD, GROW, DGIT, FWLT, EDU, ZUMZ, FCL, MICC, HOLX
Note that there are a lot more pullback (pb) than breakout (bo) plays. The reason is so many of the momentum players I watch have already broke out and are extended. My homework for next weekend is to find stocks basing near resistance levels, which will give me more breakout plays.
Monday, April 09, 2007
Deja Vu
The stock had broke out of a base in late '05, pulled back to the breakout point, and made a move in early '06 that measured 6 points from breakout. A negative RSI divergence formed and the stock took a nose dive over the summer.
The stock recovered at support in late '06, forming the same pattern we saw last year: A breakout in late '06 accompanied by a pullback to support, followed by a parabolic 6 point rise. We even have the the same RSI divergence.
Here's another doozy. Just as last time, we are around 3 points away from the 50 day moving average.
I will likely enter a short position if we see more strength in EWO. However, I will not trade the stock in the short term account I use for this blog. Shorter term, we still could see some upside. Any entry will be a position trade (I have a separate account for my intermediate term position trades) which I may hold for a few months, with a wider stop and target.
Potential Breakout-Pullback Candidate
- Price breaks out over established resistance on above average volume
- Stock closes near the high of the day, printing a long range bar
- Evidence of accumulation prior to breakout
- RSI is at a higher level than when at previous high
- Stochastics printing higher lows previous to breakout
All that is remaining for entry is a low volume pullback to support.
JAH
Sunday, April 08, 2007
Monday's Watchlist
SMSC: pb 33-33.50
IVAN: now
WEBM: pb 8.50
HOKU: 5.90-6.10
BWLD: pb 60-61
GROW: pb 29-30
EWZ: pb
JAH: pb 39-39.50
PRFT: pb 21.50
NUAN: pb 15-15.25
FLIR: pb 36
COF: reversal hammer?
FWLT: pb 60
RIO: pb
STLD: pb
SSRI: pb
XOM: bo 78
E: bo 68
TOT: bo 73
Shorts:
MNST
IFOX
RACK
GPN
AKAM
Friday, April 06, 2007
Links: What I'm Reading
Revisiting Jack Tatum's hit on Darryl Stingly.
My trading journal.
Eight nice looking charts.
Dice-K's first start for the Sox was a doozy.
Seize the day with sector ETFs.
Chart setups for Telecharts.
Is it time to go long housing?
Why Greg Oden should be the number 1 pick.
StockBee, Tom Bulkowski and trading earnings.
The "Fly" sure does love MVIS.
Buy the breakouts from commodity ranges.
Strategies to trade pre-jobs report.
How one trader trades.
Dikembe Mutombo is a great man.
Comprehensive list of propietary trading firms.
Trend following and Mexico.
Way of the Turtle book review.
Curtis's Turtle Blog.
We all should stive to be experts.
Dirk for MVP? I'd still take Nash.
Gilbert Arenas, AKA Agent Zero, has the most entertaining sports blog around.
What makes Gilbert tick.
Have a great weekend!
Thursday, April 05, 2007
New Blog to Review My Trades
This blog won't change. It will still focus on setups, trade entries and other topics, while Review My Trades will act as my trading journal.
The new site is still a work in progress. I'm really excited about the growth that I will experience by publicly reviewing my trades.
Feel free to let me know what you think of the new site.
Thursday's Watchlist
GROW: pb to 28
PRFT: pb 21-21-60
MVIS: pb 4-4.10
FWLT: pb 60
A new feature on the site is the "trade review". I spend a lot of time detailing my entries. I think it's time to focus more on exits and the overall trade. Be sure to check out the HOC review.
Trade Review: HOC
You seem to hold on to positions for only a few days even though it may seem as though the position could move higher. why is that?
The person who asked this question is quite perceptive. While I've been on a tear of late, in terms of win rate and profits, I am still frustrated because I know I should be making more money. I have been exiting trades way too early, bagging profits when I probably should stay in a little longer.
The HOC trade is a good example. When I entered the trade, at $57.94, I posted a target of $62. While I didn't say it, that target was only for partial profits. My strategy was to then move my stop up and see if the stock could breakout over new highs, which I think is likely. Using this strategy, if it breaks out, I continue to make money. If it doesn't, that's fine. I break even on the remaining shares and still have my initial profit.
Instead, I was short sighted, looked at the nice looking profit that I would gain on all of the shares, and let greed and fear based emotions get the best of me. Looking at the chart below, you will see that the stochastic level has not given a sell signal. At the least I should have stayed in the trade with half the original position.
Note that I believe I made a mistake, even if the stock tanks tomorrow. It's about doing the right thing, not stroking the ego from one trade. If I trade properly, over time what should happen will happen more frequently than not.
Setup:
Low volume pullback to support of a trending stock in a hot sector. Early entry. The safe play would have been to enter on a confirmation move a day later. However, the stock was acting perfectly and a low risk stop was in place, making for a nice reward to risk ratio.
Results:
Entered at $57.94
Exit at $60.76
$1410 gain (+4.9%)
Hold time 2 days
Final Analysis:
Great entry off of a great setup. However, I should have stuck to the plan and taken partial, rather than full, profits. This would have given me the chance to catch a big move. The fact that volume was acting nicely and stochastics are not oversold make the timing of the exit awful. I should have held on longer.
What to Work On:
A. Sticking with the plan at entry
B. Psychological aspects of profit taking.
C. Exits: partial vs full profits.
D. Exits: pay attention to stochastic indicator
What to Continue:
A. The "low volume pullback to support of momentum stocks" setup
B. Early entries on good setups with good reward to risk
Wednesday, April 04, 2007
Today's Trades: EWZ, FCEL, GES, HOC, SBGI, PDE
Wednesday's Watchlist
HOKU: coiled spring
TZOO: nice pullback after breakout
ADBE: nice pullback after breakout
EWZ: breakout over $50, but volume could be better
NUAN: good entry now
GES: look for breakout
RVSN: nice pullback after breakout
IBN: at bottom support
IFS: NR7
SON: wait for pullback to $39
RIO: pb $37.50-38
STLD: pb $41-42.25
PAAS: NR7
GG: now, bullish confirmation
Tuesday, April 03, 2007
Today's Trades and A Question About how I Spotted PDE
Sure Rahul,
Two weekends ago, I performed a sector screen, as I do every weekend. Energy was one of the stronger sectors that I identified, but I felt that it was a bit extended. I went through about 300 energy charts and identified 30 pullback candidates. PDE was one of those, and once it hit my target, I entered.
Today's Trades:
Just as with PDE, two more stocks from my watchlist pulled back to good entry levels after strong breakouts.
I bought 600 shares of FCEL at $7.89. The stock has handled support, both the breakout point and the 200 day moving average, by printing a bullish engulfing candle. I expect the stock to challenge the recent high.
I bought 500 shares of HOC at $57.94. The stock has pulled back to supprt on diminishing volume. I have placed a loose stop at $55.90, under the 50 day moving average. The target is $62, which would mark a test of old highs.
PDE Trade: A Classic Pullback From Breakout Setup
1. Price breaks out over an established resistance level.
2. Volume picks up on the way up, showing increased accumulation.
3. The stock pulls back to the old resistance level on less volume than the breakout.
4. An NR7 (lowest range day within the past seven days) prints at resistance/support.
5. The stock opens the next day above the NR7 level on good volume. This signifies that the old resistance level has successfully turned into a support level.
My target for this trade is the old high at $33, though I may take partial profits earlier and move my stop up to the break even level.
Monday, April 02, 2007
Trade and Watchlist
I bought 500 shares of PDE at $30.28.
I bought 300 shares of GES at $40.85.
I bought 600 shares of FCEL at $7.88.
I'll post charts later today.
Watchlist:
HOKU: bpt $5.80-6.
TZOO: $36-36.50
ADBE: $41-42
SMSI: pb 18
GES: $42-43
FCEL: now
ROCM: pb $20
PCLN: $52.50-53.50, target $56
CCOI: now
LNG: now
PDE: now
HES: now
RVSN: now
IFOX: short now