Monday, April 30, 2007

Today's Trade: AAPL and ADM

I bought 200 shares of AAPL at $100.25. I went over the chart on Friday.

ADM (Archer Daniels Midland Co.) reports earnings tomorrow. I will likely place a buystop at $39.75-40.10, depending on how the stock looks at the close today. If the stock clears this level (which is an intermediate term high and about a point away from where the stock is now), it will mean traders liked earnings and this level will probably become support.

Sunday, April 29, 2007

OT: George Vecsey's Baseball: A History of America's Favorite Game

One of my New Year Resolutions was to read one book per week. This week, I read George Vecsey's Baseball: A History of America's Favorite Game. I would highly recommend this book to anybody who is a sports or baseball fan. While it's not an in depth historical account of baseball's history, it is a fun, breezy, passionate look at some key events that shaped the game. Highlights included the games historical lineage, going back to Europe and Asia, the development of the game in the 1800s, racism and Jackie Robinson, the Negro League greats, Babe Ruth, free agency and Curt Flood, Pete Rose and other big scandals, and the current state of the game.

I found the chapters on race and the game the most moving. Here is one of my favorite passages:
Some Americans began talking openly about the injustice that blacks were dying for their country in service but were still shut out from organized baseball. "I can play in Mexico." Negro League pitcher Nate Moreland had been quoted as saying, "but I have to fight for America where I can't play.



Saturday, April 28, 2007

How would you play AAPL

As most of you know (and if you don't, and you are a trader, you are slacking) Apple broke out to knew highs on significant volume after earnings. The question now is, how do we play this brekaout?

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


First of all, I would like to let you know that I enjoy your "Market Speculator" blog and find it very educational. After reading many of your posts, I noticed that you prefer not to micromanage your trades and sometimes only check the market a few times a session because of your day job. How do you enter and exit your trades? Do you use buy stops to enter positions or do you enter a position by buying when you get an opportunity to check the market?

I check the market a few times per day, in the morning, lunch and at the close. If I have time while at work, I might sneak in a few more looks. Each time I check in, I take a look at all of the stocks on my watchlist to see if they are at my buypoints. If the stock and market looks good, I enter.

This method works really well for breakout-pullback plays, but not quite as well if I am trying to time pure breakout entries. Therefore, I use buy stops for breakout plays. For example, if a stock is basing near a strong resistance level, I'll put a buy stop above that level. The drawback with the buy stop is I can't monitor the volume.

The key to trading part-time is to do loads of research at night, build a strong watchlist, and stick to that watchlist during the day.

Also, when you exit, do you enter a profit target order or just exit when you get around to checking the market and if the price is good you close the position?

I have a profit target based on technical factors for every trade I enter. I try to stick to the target, but may exit early if the stock isn't acting as it should.

Trailing stop?

Depending on the setup and how the sector is acting, I'll either use a trailing stop, take partial profits as each target is met, or exit in full. Trailing stops work best for trend trades lasting longer than one week.

Any tips you can suggest for swing trading the market and holding a day time job?

Have a disciplined post and pre-market routine. Carefully study market and sector action every day. Pay attention to market sentiment (high/lows, percent above 50 day moving average, etc). Study at least 300 charts per day. This is easy if you have Telechart. Create a daily watchlist based on your preferred setups. Preperation is the key to success as a part-time trader.

Here are some of my past posts on part-time trading, preperation and routines:







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
View the rest of my site, including today's trades.

Thursday, April 26, 2007

Today's Trade: JSDA and VDSI

I sold 500 shares of VDSI at $20.65 (entry at $17.63) for a $1510 gain (+17.2%). Check out my reasoning for entry here. It was the perfect accumulation and pullback to support play.

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

Thanks to all of you who commented on AMZN. Most were either non-committal or leaned my way. Rich adds some fundamentals into the picture.

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

Like many, I am kicking myself for not entering AMZN yesterday. On Thursday, I featured it as a breakout-pullback candidate. When I made my trades yesterday, I came very close to taking a 500 share position at around $44.40, but decided against it for two reasons. First, I had made my buy entry closer to the the breakout, between $44.00-44.20. Second, the fact that earnings would be reported scared me. Now, I'm sitting here thinking about the $5000 I passed up :(

In all seriousness, I have no problem with passing on the trade pre-earnings. You never know how that will go. However, the fact that I held out because of 20 cents was a bonehead move. As I've noted in the past, I tend not to be very precise with entries. I am a swing trader looking for at least 1-5 point moves, so in the grand scheme of things, 20 cents doesn't mean much.

Now back to AMZN. If we look at the chart history, it looks like a high probability short setup. It's always risky shorting an uptrending breakout, but this stock has not handled extremely overbought RSI levels well. Take note of past overbought RSI levels (70-90) on the chart below. If you were willing to hold on for a little while (at least a month), you would have made a lot of money. Will this trend continue? I may take a small position (no more than 400 shares), at $55, betting that it will. I would not recommend this trade for the faint of heart, and I certainly will set a stop after entering.

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

ESRX looks like a good breakout-pullback candidate. I'd wait for a low volume pullback to the bottom of the long price bar.















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 JSDA at $26.41.

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.


I sold 300 shares of VLO at $68.70 (entry at $66.48) for a $666 gain (3.3%). The stock is at the recent high and a bearish RSI divergence has formed.



I sold 200 shares of AAPL at $93.60 (entry at $91.05) for a $510 gain (2.8%). I'll buy if the stock again pulls back to the 50 day moving average.



Along with STLD, ZOLT, EWZ and JSDA, I am still holding PAAS, FUL, VDSI and QID.

Monday, April 23, 2007

Today's Trade: PAAS

I bought 400 shares of PAAS at $30.46. The stock has pulled back to prior resistance and is holding up well. My stop will be placed at $29.10, just under the 50 day moving average.


Sunday, April 22, 2007

Metals and Shorts Watchlist

Here are snapshots of stocks I'm watching in the metals sector, along with some shorts:

Metals:

















Shorts:

Friday, April 20, 2007

Breakout Chart: XOM

Exxon Mobil Corp. (XOM) broke out to new highs on above average volume. A low volume pullback to the prior highs, just under $79, would normally provide a good entry point.

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

I entered ZUMZ yesterday on a pullback to support, and today it looks as though we have confirmation that the stock is going to bounce. ZUMZ printed a bullish engulfing pattern where three areas of support converged (the 50 day moving average, price and gap support). I could not have hoped for anything better.

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

BA and AMZN look to be setting up for breakout-pullback plays. Here is a quick summary of what I like to see on the breakout:
  1. Price breaks out over established resistance on above average volume

  2. Stock closes near the high of the day, printing a long range bar

  3. Evidence of accumulation prior to breakout

  4. RSI is at a higher level than when at previous high

  5. 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

I bought 400 shares of GROW at $29.45. It's back at the bottom of it's trading range on low volume, so I've entered again. I'll keep working this range until the strategy stops working. My target is $32-33, and my stop will be in the $27.50-28 range.

Wednesday, April 18, 2007

Today's Trade: ZUMZ

I bought 500 shares of ZUMZ at $38.83. The stock has pulled back to the early March breakout point on low volume, has a strong OBV reading and is oversold. When trading this "breakout-pullback" setup, I would normally wait until the stock moved out of oversold territory. Due to the fact that there is such as clearly defined stop in place, I went ahead with the trade. My stop is at $37, just under the 50 day moving average and previous price congestion. My intitial target is the previous high of $42, giving me a 1.75 to 1 reward-to-risk.

Tuesday, April 17, 2007

Today's Trades: TZOO, GROW, MVIS, FUL, VLO

I sold 500 shares of TZOO at $39.85 (entry at 37.72) for a $1065 gain (+5.6%). This stock was a textbook breakout-pullback play. I bought on a pullback to support after the mid-March breakout, and sold on the new breakout. In the meantime, I was also able to make a few trades within the range that formed post breakout (while always making sure to have a core position while waiting for another leg up).

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

FPIC broke out of a three month triangle formation. Volume and the OBV indicator (a measure of volume at the close) show increased accumulation during the formation of the triangle, suggesting this breakout is for real and any pullback will be met with more buying. I will enter on a low volume pullback to $46.


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

I took my daughter to Barnes and Noble today. Of course, I had to sneak over to the investing section. I picked up Steve Nison's Japanese Candlestick Charting Techniques, Second Edition and Pring on Price Patterns : The Definitive Guide to Price Pattern Analysis and Intrepretation

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

Watchlist:
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 sold 300 shares of HES at $57.55 (entry at $55.91) for a $492 gain (+2.9%).

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 weakness finally gave me some decent pullbacks in stocks on my watchlist. While most of them are still overbought, there is a high probability that I will take a position in at least one of these ten stocks tomorrow: BWLD, DGIT, VDSI, EWZ, FUL, GES, OEH, TTWO, XOM and RIG.

Today's Trades: GROW, MVIS, QID, EWZ, HOKU

I sold 600 shares of EWZ at $51.80 (entry at $50.43) for an $822 gain (+2.7%). I suspect that it will retest support at $50, which could provide another entry.

I sold 1000 shares of HOKU at $6.44 (entry at $6.11) for a $660 gain (+5.4%). There is not enough volume to think this price will hold. As with EWZ, I will re-buy on a pullback if it is on low volume.

I bought 400 shares of QID at $51.85. Take note of the stochastic indicator in the chart below. QID has rewarded buys after stochastics move out of extremely oversold territory.



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

Here is my primary watchlist for the rest of the week. Of course, I'll add to it as the week goes on.

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

EWO, an Austrian ETF, is looking eerily similar to the way it looked at this time last year.

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

JAH (Jarden Corp.) has most of the characteristics I look for in a breakout-pullback stock:
  1. Price breaks out over established resistance on above average volume
  2. Stock closes near the high of the day, printing a long range bar
  3. Evidence of accumulation prior to breakout
  4. RSI is at a higher level than when at previous high
  5. 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

Here are the stocks on my primary list for Monday:

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

Here is a collection of links I've found noteworthy over the past week or so:


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

I've been meaning to start an in-depth review of all of my trades this year, and the response to my "trade review" post last night was positive, so I've started a new blog that will compliment this one. Please head over to www.reviewmytrades.blogspot.com and take a look at my first trade review.

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

My list hasn't changed much from Wednesday, but I did add a few:

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

Before posting my review of the HOC trade, I'd like to answer a question posed to me after the latest "today's trades" post. The question:

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

I took profits from my 500 share position in HOC at $60.76 (entry at $57.94) for a $1410 gain (+4.9%).

I sold shares of PDE at $31.73 (entry at $30.28) for a $725 gain (+4.8%).

I sold 500 shares of SBGI at $16.18 (entry at $15.23) for a $475 gain (+6.2%).

I sold 300 shares of GES at $42.13 (entry at $40.85) for a $384 gain (+3.1%).

I was stopped out of FCEL for no gain or loss. I had moved my stop to break even level once it moved up yesterday.

I bought 600 shares of EWZ at $50.43. The stock has broke out of a big base at $50, which has acted as resistance. I hope to annotate a chart tonight, but take a look at the move out of the base on the chart below.

I am holding EWZ, HES, TZOO and HOKU. I plan to go over each of today's exits today or tomorrow.

Wednesday's Watchlist

Here is my primary watchlist for Wednesday:

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

In reference to the PDE setup, Rahul asked "Indeed a good trade. Could you tell how it came on your radar."

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

I traded a classic setup today, the good old pullback to support after a breakout. The elements that lead to entry include:

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 300 shares of HES at $55.91
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