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

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

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.