Friday, February 29, 2008

Today's Trades: TWM, CREE, AKS and DECK

I sold 400 shares of TWM at $83.64 (entry at $77.10) for a $2616 gain (+8.4%). I will likely enter again on a pullback or breakout of trading range.

I was stopped out of CREE at $31.90 (entry at $33.53) for a $489 loss (-4.8%). I still like the chart but did not want to increase risk by lowering the stop.

I went short 100 shares of DECK at $118.04

I bought 300 shares of AKS at an average price of $52.89. Steel stocks, while pulling back with the market today, seem to be holding up well. I'll take any chance I can get to play this stock. I am using a pretty tight stop, so risk is minimal.

Here is the DECK. The stock (which I think will be worthless 2 years from now) tanked last night and broke it's weak reaction trend (dead cat bounce after trend breaking down move). It made it all the way down to the $111 range. I used the relief bounce for short entry. If the 200 day moving average breaks, we'll see a big drop.

2 comments:

Tyro said...

I really liked the ALXN short you highlighted so I jumped in sort at $62, but after it dropped to $60 without pause, I got out. Looking at the chart, I guess I could have taken a $60 short and covered at $62 a second time :) I'm not generally a day trader, but after nice breakouts turn into losses, I'm wondering if the right strategy is to cinch up stops and take quick profits or use much wider stops and longer time frames.

It seems there are a lot of moves that are failing and the best trades (in hindsight of course) seem to be fading the breaks or buying pullbacks after the failed breakouts. What's your take? Is this an illusion or is a real phenomenon caused by the crazily range-bound market?

The Market Speculator said...

Tyro,
On a quick move like you got on ALXN, if it was originally a swing trade, I might take partial profits and move my stop up to lock a gain on the trade.

I generally buy on the pullback anyway. There have been alot of failed breakouts because we are in a bear market. Those playing breakouts in stocks way off their highs are going to get burned. These are just reaction bounces, nothing more.


My strategy is to play bear flags and breakdowns for shorts, and to be very selective in stocks I am long. Only play longs in very strong sectors (like commodity) that are near highs and have strong relative strength, and earnings related breakouts.