Week 51 Trade Recap

I had better discipline this past week when it comes to how many trades I made.  I only made four this past week.  I also learned a new rule.  It has to do with stocks crossing from under $1.00 to over $1.00.   I don’t know for sure how concrete this rule is but I got burned twice by not following it.  In my defense, I didn’t know about it before my trades.  After learning of this (after my second loss) I started to notice this behavior with other stocks as well, so maybe there is something to it?  I don’t know.  My sample size is still pretty small, but I will be following it from now on.  I list the rule below in my trades where I got burned.

December 23 was the last day of my 14-day free trial at Investor’s Underground.  I did not renew the subscription.  I plan on reviewing all my notes that I have from being in the chat for two weeks and reading the blog posts and websites some of the people in chat pointed me towards.  I will be getting my Cy Group application finished this weekend and sent off.  It is filled out, I just need to scan it into the computer (about 50 pages) and send it back to them.  If they accept me into their program I’ll need to learn their platform as well.  Once all that is up to speed, I’ll be renewing my IU chat subscription.  That will probably happen around mid to late January.

The trades from last week are listed in alphabetical order.

AMKR – I bought this on a pre-market alert in IU’s chat Monday.  I didn’t get in right away at the open and let it pull back first.  I saw a little volume spike and bought some.  The long term chart seemed to indicate resistance near $7.50, but if it could get through that, then $7.70 might be in the cards.  Either way, with my small positions, I was looking to make a good trade rather than make a ton of money.  I would have sold it on Monday when it couldn’t break $7.50, but didn’t want to use up a day trade so I held over night.  It tried again on Tuesday for $7.50 twice but couldn’t get over $7.40.  The second run at $7.40 ended so quickly that I couldn’t get out fast after enough on that big drop.  When it stalled near $7.40, I got out.  3% gain and didn’t have to use a day trade.

CGEM – I bought this on Tuesday morning right at the open after overnight news with Pfizer.  I had a good entry point right when the market opened at $4.91 and thought about selling when it hit $5.50, but I had the PDR over my head so I figured I’d try to hold it all day to save a day trade.  So, another gain turns into another loss as I got out after it failed to maintain its sideways action late morning.

This was an interesting trade.  After I bought there was a lot of chatter about whether it was a good buy or not.  One person in particular kept making reference to it being a bad idea, etc.  I asked him about his comments in a private message to him and we talked for a few about it.  After hours, he (I don’t know if he was a man or woman actually so I’m using that gender generally speaking) spent about 90 minutes in a private chat with me talking about Bollinger Bands, 20 EMA, slow stochastics and how they help in spotting buy opportunities and short sale opportunities.  I copied that entire chat session into a Word document to study later as well.  It was very interesting and very helpful.

That was one thing I learned about chat in that two weeks.  Everyone (at least those I spoke with) in there is really helpful and want to help teach others.

HLCS – This was bought on an IU alert.  This is the second of the two $1.00 trades I made.  It was shortly after I sold out of this trade that I learned the following rule.  I learned that there’s an unwritten rule about stocks crossing the $1.00 mark.  I don’t know the exact rule, but there seems to be a consensus that after a stock crosses $1.00 and makes 15% or so, it pulls back.  I didn’t know that.  I bought HLCS after it crossed $1.00 and as soon as I hit the buy button it pulled right back.  I sold it after it couldn’t hold the slight consolidation between $1.05 and $1.08.

YRCW – This was mentioned on CNBC at about 10:30.  I pulled up the chart and it was at $1.10.  As volume increased I bought in looking for a slight run.  However, by the time I found the guts to buy, I had bought at the top of the spike at $1.18.  I held on for a little while, but it broke $1.12 and I sold.  This was my first buy of a stock crossing $.99.  HLCS was purchased about 20 minutes later and some time after that purchase of HLCS did I learn about this $.99 cross rule.

I started my experiment with a balance of $10,361.53 and that now stands at $9,273.58.  That’s a loss of $1,087.95, -10.5%.

Watch List for 12-23-09

This is my last watch list for this week.  With the market closing early on Christmas Eve, I’m not even going to bother trading.  I expect volume to be light and I’m just not interested in trying to play that kind of weak action.

I made three trades today and I’m holding one over night, as outlined in my watch list below.  My two day trades failed me.  I got out fast to minimize my losses, but it’s hard to pull the trigger when everything I buy goes south in about two minutes time.

AAC – They announced a cash dividend of $.55 per share.  Weird how the press release was after the market closed, but the spike came mid-day.  Not that I’m saying anything…..just funny how that worked.  I will be watching for another try at crossing and holding over $1.00.  It is right at its one year high with its next point of resistance being around $1.20 from September 2008.

ADES – Broke out above its 52 week high early in the morning on contract news.  It briefly went over $7.00 but could not hold that level.  Monday, however, was its second big day on volume and price.  So tomorrow will be its third big day and I’ve found these can be dangerous.

AHD – Another stock spiking up on big volume and at its 52 week high.  This stock went into the last 30 minutes on good volume and strong price action to stop right at $7.00.  This action was based on a Citigroup analyst upgrade from sell to hold.

AMKR – I bought this stock after its morning pull back.  They raised their earnings guidance and the stock gapped up over night.  $7.50 is clear resistance and it made it up to that level right near the close but didn’t break over it.  I’m holding it over night mainly because I didn’t want to burn a day trade.  I would have sold it after it couldn’t break $7.50, but I’ll sell in the morning if it drops too much.  I’d like a second day gap up over $7.50 and then maybe a run at $7.70 (52 week high).  But that’s just hoping.

ATHX – Just when you thought it couldn’t go any higher, it did.  I watched this all day, afraid to chase it, and just couldn’t believe it.  Evidently, they entered into an agreement with Pfizer to develop and commercialize a stem cell therapy currently in development.

MBI, MTG, PMI and RDN – These are all home mortgage plays and all went up yesterday on the existing home sales data that came out.  I doubt I will play any of them, but they are all in my notes for next month when the housing data comes out again.

I hope everyone out there that celebrates Christmas has a wonderful weekend.  We have family dinners planned for Christmas Eve and Christmas night.  Then Sunday night we are having a big dinner party with friends here locally as well as a bunch who are coming into town for the weekend.  It’ll be a really nice four-day relaxing time.

Of course, not everyone will be having such a relaxing weekend.  There are 100′s of thousands of people who won’t be, but having served in the military, my thoughts go to those that are overseas this weekend eating dinner in the desert and mountains with their teammates.  And their rifles by their sides.  They all volunteered to serve and that takes a special person and a special family.  Don’t forget about them this weekend.

Merry Christmas and Happy Holidays everyone.

Watch List 12-22-09

Sorry, no detailed watch list for tomorrow.

My wife’s sister and her husband had a new baby and we spent most of this evening at the hospital with them and their new child, Orion.  8 lbs, 2 ounces.  They named him after the constellation.  So, once again family takes priority here.

Just off the top of my head, I’ll probably keep an eye on LNG again tomorrow.  I missed the move in the first few minutes of this morning.  I got caught up in the chat and took my eye off it and then didn’t want to chase it into the morning run up.  It pulled back pretty well then bounced off $2.60ish.  I made the comment that $2.60 seems to be the old support and it might.  I will definitely watch it tomorrow in case it jumps in the morning again.  Natural gas seems to be making a come back in the press and this may be a good multi-day play.

That’s about it for now.

Watch List for 12-21-09

Nuts!

I updated this post after I realized I neglected to include my dollar/percentage performance.  The numbers are at the bottom.

ASYS – This is a solar play that made a huge break out last Friday.  It slowly uptrending all day and broke over $10.00 in the last 30 minutes.  There did not seem to be any large volume spike near the end like I have seen with so many stocks on Friday.  The company recently announced $10M in orders, but won’t specify who the buyers were.  I haven’t been doing this long enough to know if that’s odd or not, but it seems like it would be.  $8.75 seems to be the old support and it broke through that rather nicely.  I’ll watch how this plays out and see if it holds $10.00 or if it pulls back after such a large price jump.  I would like to see a bit more volume too.  Only 419k traded on Friday.

DAN – This company got upgraded by JP Morgan on Friday before the open and the stock spiked up pretty good.  It also held that spike and finished strong.  Once again, a large spike in volume at the end as the quadruple witching hour took its effects out on the stock.  They also announced over the weekend they are selling 10 of their facilities to a Mexican firm.  That may put the brakes on me making any trades on this company as I don’t know how that is going to impact the stock.

LNG – A natural gas company that has had a pretty decent run over the last week.  Once again, a large volume spike at the end of the day.  The stock is approaching its old support level here around $2.50 – $2.60.  If it can break over that then $3.00 could be within reach.  No news right now that I could find, so maybe it is playing off the XTO merger last week.

SENO – This company was cleared by a jury in a court case reference a patent infringement lawsuit.  It finished Friday going sideways but with a strong last 20 minutes of trading.  It is well over its 52 week high.  I’ll keep an eye on this for a possible move through $7.00.  Although the volume was under 1M, the volume it had on Friday is not that far removed from what would be considered heavy to move the stock and far above its 3-month average.  It has had only 2 weeks of over 500k shares in the last couple of years, and it did 500+k on Friday alone.

SMOD – Posted better than expected 1Q profit after the close on Thursday and gapped higher in the morning to just over $6.00.  It was able to hold just over $6.00 for the rest of the day.  Maybe look for a pullback in the morning and then another push to break over $6.00.  $6.60 looks like the next point of resistance.

I started this experiment with $10,361.53 and I currently stand at $9,510.22 for a dollar loss of $851.31, -8.2%.

Week 50 Trade Recap

I made too many trades this week.  At one point during the week I had four stocks being traded at the same time.  That’s just too many for me.  For one, it doesn’t allow me time to do research looking for other buys since I spend all my time watching my current holdings.  I need to get my holding down to just one or two at a time.  Some of those trades were made with no firm plan or strategy involved.  I spent the whole week in IU’s chat and learned some things about momentum and spoke to a few people in there as well.  Some of those I spoke to are new to this like me as well as some who are more experienced.  It was nice talking to some of the new traders in there and see what they are doing to help themselves make better decisions.  I also took some of the advice of the more experienced traders.  I decided to re-work some of my rules and adjust my strategy for next week.

So, here’s my results from the last five days in alphabetical order:

ANDS – This is a pharma stock that I bought on positive drug news on Thursday morning (first red mark).  It gapped down overnight from Wednesday and started to uptrend from $2.60.  With the positive news and $3.00 appearing to be resistance, it appeared I could get a $.25 move during the day or into Friday.  Boy was I wrong.  It dropped to $2.50 on Thursday, went sideways then climbed back to $2.70, only to finish weakly.  I held it overnight and it dropped Friday as well.  Once it lost support there at $2.50 I was done with it.  I sold for another loss.  This is a two-day chart from Thursday and Friday.

ANX – I bought this into the close on Monday as it showed good strength and volume for an overnight hold.  It spiked up a little bit on Tuesday but I didn’t get out as it was only up about $.02, then it collapsed really fast.  I was still up on the trade and watched it consolidate looking for another climb, but it dropped again and I sold for a small loss.  I sold out of fear and panic as it was only down about $.02 and starting to go sideways.  Really disappointing as I should have held on for just a few more minutes because it started to go sideways and climb.  Then, you can see the rest of the story from there.  This is a five-day chart of last week.

BGEM – I held 5,000 shares of BGEM over the weekend on a tip that was chatted about on Investor’s Live.  I got in at $.345 about two minutes before the close and sold on the Monday morning spike at $.40.  I tried a new tactic and sold 3000 shares on the first spike in case there was a pull back and then second spike later on.  I wanted to make sure I locked in some profits just in case things didn’t work like was expected.  It pulled back and then jumped again but I only got $.40 the second time as well instead of the high on that second spike of $.44.  That’s okay.  Then out of nowhere, it got pumped mid-day and went to $.70 by Tuesday.  No way to predict.  Bummer.

I’m happy that I made a profit and I’m happy it reacted the way it was predicted.  This may not have been a stock I picked myself, but the process I’m trying to master is using my own ideas as well as listening to those that are far better at this then I am.  So, this trade was clearly a success.  Total profit, minus fees $244.96.  By the way, a 3-month paid subscription to Investor’s Underground is $250.00.  Food for thought.  The two marks on the 14th are my two sales.

FRE – Speaking of trades that I spotted.  I typically have CNBC on during the trading day in the room with me.  On Friday there was news out reference the passing of HR 4173.  FRE spiked on this news and closed flat into the close Friday but on increased volume so I bought 1,000 shares as it closed at $1.29.  On Monday morning the momentum continued and I sold out at $1.38.  I was concerned it wouldn’t break $1.50 (nice round number) and I wanted to take my profit since I had it.  It did go as high as $1.60 on Tuesday, but its FRE.  The company is dead, so I didn’t want to hold this too long.  Just like TLB from last week.  Quick profit and get out.  This is what I have been doing for the last couple days on paper.  I’ve seen this type action with mentions on CNBC before but rarely am I in front of my computer when it happens.

I’ll be looking for when HR4173 is signed into law by President Obama as there will probably be another spike on both of these companies.

FNM – See the FRE trade above as to the how and why I bought this.  I held it till Tuesday morning when it spiked up and I sold out.  Probably too early as it continued up all morning.  I got took my profits and left for the same reasons mentioned above.

LZB – I sold this on Wednesday.  I held it through Tuesday when it crossed over $11.00 but it held just under $11.00 so I held for a spike on Wednesday morning.  I didn’t get a spike, but it crossed $11.00 again and I sold it at $11.05.  This has been my best trade so far.  I showed good patience in holding it and timed my entry and exit pretty well.  Course, my entry was a Tim Sykes alert, which is fine in my book.  He bailed on this stock when it didn’t break out fast, but I held on when it didn’t crack what I interpreted to be support around $9.70.  That big blue volume spike right before I bought it was his alert.  I usually wait a few minutes after his alerts to buy.  In this case I got about a $.10 better entry point by waiting.  Unless you count the drop Thursday morning, of course.  Too bad I have about half a dozen other trades that sucked.

MSHL – I bought this into the close on Monday looking for more strength going into FDA news on Thursday.  The volume dried up Tuesday morning and it dropped pretty quick and I cut my loss.  As you can see, the news was insignificant anyway.

DPDW – This is my dumbest trade of the year.  By far, hands down.  Dumb.  I had just sold MSHL and ANX for losses on Tuesday and was looking for a quick play to make up my money from those losses.  I bought strictly on emotion and hunch.  The volume was spiking and I thought I could make my money back from my losses on MSHL and ANX.  I actually still have it in my account since it hasn’t collapsed, but it’s tying up some money for other things and I just should never have bought it.  The volume has collapsed as well.  Time will tell how things go but the position is small, like my other ones, so I can afford to wait things out.  If I get any pop at all, in either direction, I’m out.

EYSM – This is a pump and dump that is currently being pumped.  I’m still flat here waiting over the weekend as it gains some pump.  Friday started to scare me, but I held on as the pump emails came in and it gained strength the rest of the day to finish down just a hair.  It has been having a lot of morning volume which has dried up every afternoon.

VLNC – Like I mentioned earlier, I have the TV on during the trading day and CNBC gave positive news on this stock.  IU alerted to it as well and it took off.  It had a slight pull back and I bought some.  It then started to pull back to $1.00 and held that pretty well so I kept holding it.  It looks like its support is around $.85 (also its 52 week low) so I plan on holding unless it breaks that level.  This level here around $1.00 is also its 3-year support.  It dropped to there right at the close on Friday and I may end up losing on this one.  My feeling is, since the volume came literally in the last few minutes of trading, I have to wonder how much of that had to do with the quadruple witching hour and lots of sellers rebalancing their books.  If I see any strength off this support level I may add to my holdings after what may have just been panic selling from institutions.