EWZ Entry Strategy

One of my favorite buy the dip plays, EWZ (Brazilian ETF), has pulled back to the 50 day moving average. There are two ways I am looking to enter this stock. I'm going to make a very small buy now, right around the support area, with a stop around $59-60. The next buy point is on a breakout of $70, the old high.

It is best to play this very conservatively, since there is a more than small chance that the current bounce could setup a breakdown below support. Therefore, I will only make a small nibble here (around 250 shares). If we get a breakout of $70, that would be a signal that the stock only experienced a natural correction in the midst of a continued bull move. This is the level where I would make bigger position sizing entries.

Trades: EWZ and JOYG

I am posting yesterday's trades a day late due to computer problems.

I bought 500 shares of JOYG at 62.04. As I noted on Monday, I was looking for a breakout with better than average volume above $62.



I bought 500 shares of EWZ at $64.25. For quite some time, EWZ has been the perfect "buy the dip" stock. The Brazilian ETF is not to be missed on dips.

Today's Trade: EWZ

I took a small nible in EWZ at the close yesterday, with a 300 share position $60.35. I've placed a mental stop just under $60, with an initial target at the recent all time high, around $63. I'll look to add more if it can break into new high territory.

If you look at the trend on the chart below, you'll see that the "Brazil trade" has been to aggresively buy dips and breakouts. Nothing too complicated here, just buy on any dip and set a low risk stop. While I have no empirical evidence, I have a gut feeling this will continue until we reach $100. As usual, I'll continue with what has worked until it stops working.

at $60.

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.

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.

Anatomy of a Possible Breakout Chart: EWZ

Based on the annotations to this chart of EWZ, I would be a buyer on a high volume break of $50, or a low volume pullback to $$47. The key to this chart is not only the support and resistance levels, but the pickup in volume. This indicates institutional interest. The stock has moved to the old highs on higher volume than the original ascent.

It's a Small World - ETF Style

It's amazing how similar almost every single market looks, whether we are talking sectors or countries. Let's take at some country ETFs.

I'll start off with Brazil, since EWZ is one of my favorite trades. It is not surprising that we see a death defying drop followed by a low volume pullback into resistance that works off the oversold conditions that occurred last week.

Now let's look at the U.S., via the S&P 500. I can analyze this chart by cutting and pasting what I wrote above. I'm not gonna even bother to annotate the chart.

Malaysia- ditto

Singapore- control c, control v

Let's move on from Asia and go to Europe. France - cut and paste

Every chart I find is going to be more of the same.

If you think this bounce is just a pause before the next leg down, you can basically take your pick of just about any country, index or sector. It makes no difference. As you all know, I've been using QID as my current "go to" trading vehicle, but I could very well pick from many legit choices.

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Today's Trades: EWZ and QID

I sold 700 shares of EWZ at $49.74 (entry at $48.44) for a $910 gain (+2.7%). I originally entered this trade as more of a long term swing trade. However, I didn't trust the gap up this morning, since it wasn't on tremendous volume. If I can enter again at support within the next few days, I will. Otherwise, I'm happy with the gain and will move on.

I bought 600 shares of QID at $49.85. QID is a leveraged ETF, which is basically the same as double shorting the Nasdaq ETF. As you can see from the chart below, QID is extremely oversold and at a key support area. The ETF has generally been kind to those who enter at this point, as shown by the arrows on the chart. As you can surmise, I am not confident that the Nasdaq is going to breakout to new highs. However, if it does, this is still a low risk trade. I will place a stop at about $48.85, ensuring that I lose no more than one point if things go bad on this trade.


BTW, I like the pullback in high end retail stocks such as RL, TIF and COH. I'm still not ready to enter, but will be watching closely over the next few days.

Today's Trade: EWZ, AKAM and RATE

I sold 500 shares of RATE at $43.44 (entry at $42.53)for a $455 gain (+2.1%).

I sold AKAM at $56.90 (entry at $55.63) for a $508 gain (2.2%).

I bought 700 shares of EWZ at $48.44.

Over the past six months EWZ has been in a solid uptrend with the 20 day MA providing support. There have been a few blips, however the 50 day MA has provided additional support, and the stock has always rebounded well above the 20 day MA. Therefore, my stop will be placed just under the 50 day MA, at $46.20. This is what I call a "trend trade". I am basically ignoring the indicators (RSI looks good but stochastics say overbought) and just following the trend.

I probably could have waited for a slightly deeper pullback, say all the way to the 20 day MA ($47.82). However, when playing a trend with a longer holding time, I don't feel the need to quibble over 50 cents.

Trades: USO, RIO and EWZ

I had internet problems yesterday and was not able to post the following trades:

I sold 400 shares of RIO at $34.25 (entry at $32.25) for an $800 gain (+6.2%).

I sold 500 shares of EWZ at $48.00 (entry at $46.10) for a $950 gain (+4.1%).

I sold 500 shares of USO at $48.10 (entry at $46.80) for a $650 gain (+2.7%).

I still like all three of these stocks, and the corresponding sectors, but all three are a bit extended. If I see a nice pullback to support levels, I may re-enter. I know this may be a case of overtrading, but the fact that all three are near resistance levels makes it seem at least somewhat prudent to take my profits.

I am still holding CAL (short) and BLUD (long).

Today's Trades: EWZ and RIO

As discussed last night, EWZ looks attractive as a pullback candidate, so I bought 500 shares at $46.10.

I bought 400 shares of RIO at $32.25. I've been waiting for a decent entry in a steel/metal stock for quite some time now, and finally found a decent pullback. I placed my stop at $30.90, just under the last breakout. Note the smaller position size. The fact that the stock has been on such a tear required me to take a reduced position.

Brazil is Hot! EWZ Chart.

EWZ is setting up for a nice pullback entry. While the solid uptrend and pullback to the 50 day moving average are nice, what really makes this stock attractive is the surge in volume this month. The big money is definitely flowing into this Brazilian ETF.