I hope you keep it up CXbby. I love reading other people's financial viewpoints and your analysis is a great informational tool.
CXbby, are you still in that FSLR short. I noticed the high yesterday was exactly at your stop point at $176.05. Otherwise FSLR hit $165 today. Good directional call regardless.
Sorry, I meant 0.56 cents. My stop was at $176.06, a penny above. If you look at the intraday chart for FSLR yesterday, it formed a flag/pennant between 9:40 and 10:00, after a vertical move up. I shorted during this time, and a breakout to the upside would have stopped me out. Yes I am still in, however I am not looking for a big trade here. This may just be a simple case of retracement after hitting resistance. Nothing serious like breaking down. The most I look to make is to $150, I will be out by then for sure. In the meantime, I will be looking to get out on any meaningful push up. Look at it as a swing-scalp, where you risk 0.56 cents to make 25 points. EDIT: Mr. Brightside, I'm not sure if this is what you meant, but I put in that stop AFTER it hit the high of the day, not before. No, I cannot predict where the high will be for that stock, now THAT would be a guru. lol.
Nothing much has changed for FITB. The things I said in my previous post still apply. Support is still at 6.30. This means any short would have to be a break BELOW that price, preferably on high volume. Since my last post on this stock, it has bounced nicely along with the market. It is too late for a long, however if it gets back down there, you can take a position, and put your stop under 6.30.
Thanks. I have almost no knowledge of technical trading so just picked one you hadn't updated. It makes sense. Plus/Minus what type of returns do you get? How often do you trade? Irrespective of the work you might be doing for your "job", how many hours a day/week would you spend on this? Average joe, but smart, understands the market, business, etc, but has a job, family, responsibilities...does he have enough time to do this?
I apologize for the harsh words and condescending tone in my previous update. Thanks guys for the support. I don't have anything new on the horizon, but I will post them as they come to me. Like I mentioned earlier, instead of giving stock tips, I would rather impart the process behind trading. This will give you the ability to find your own trades, and hopefully share here. That was the purpose of this thread to begin with, a sharing of ideas, a forum for knowledge. And I thank Mango for your contributions to this. A few of the trades I have mentioned have worked out nicely. However, I assure you, I will be wrong many many times. This is not modesty, it is reality. TA is not a magic formula, it is not a guarantee. In the end it is only a tool for the trader using it. You can draw all the lines you want on charts, at the end of the day you still have to go out and trade it correctly. And after doing everything right, there are still no guarantees. Trades fail all the time. There are false breakouts, fake outs, and sometimes just genuine head scratchers that make zero sense. This is simply a part of the Game and part of life. This is also why stock tips are worthless, it is the process that matters. Learn the process, and you will limit your losses on those bad breaks, and make up for it when things go your way. ______________________________ Mango, For XOM I would like it to put in some sort of topping/reversal candle before going short. Something like the Doji it made at 75 in June. This stock will most likely trade with the market, it is it's biggest component after all. And for the general market, at this point I honestly have no idea where it is headed next. You would think a correction is due, but then what? Higher highs? Back down to the lows? I would have to wait and see what it does next to determine my course of action. ______________________________ thelasik, I don't see any immediate trade for DVN or TGP. My method is based on buying through resistance, shorting through support. This gives me the optimal entry point, since I will have a minimal at stake. My stops will always be right behind these supports and resistances. Be careful of looking at high dividend yields, it may be a genuine good deal, or it may be trading there because of real risk. This is almost impossible to determine, which is why I never trade based on fundamentals. TA is still sparsely used in the general investment community. Even less so on the professional ranks. It has the stigma of "voodoo", "black magic" to many. Drawing lines on charts, deciphering "patterns", all too eccentric for any "serious" money manager. In fact in academia, they actually TEACH you to disregard this stuff. A funny anecdote I would like to relate: In college, I attended a course called Investment Analysis. The final project was handed out the first day of class: to manage a portfolio worth $500,000 fake money. Who ever came in 1st by the end of the semester, received 10% extra credit. The professor also managed a portfolio himself. Any and everyone who could beat him, received 5%. Now this professor of ours was the most stubborn old b*stard I have ever met. By this time in college I have already been trading on my own for years, so several times I brought up TA in class. This was only to be instantly struck down by him. He was so stuck on his Random Walk theory that he could not imagine possibly using the past as a guide to the future. And least of all any of my "voodoo". However curiously enough, he was also adamant on the notion that IPOs generally underperformed their first 6 months, due to many of his "fundamental" explanations. Luckily for him, a prominent company was brought public during this time frame, so he promptly went short using his portfolio. By the end of the semester, 2nd place had a portfolio worth $580,000. Mine was $800,000+. And the IPO that the professor shorted, was GOOG. Needless to say, everyone in that class got the 5% extra credit. And on the last day of the semester, this stubborn old professor yielded me the stage to teach a class on Technical Analysis. He wasn't so bad after all. What I related to my fellow students was this: In reality, there is nothing supernatural about TA. There are patterns in the stock market just as there are patterns in nature. In fact, the patterns in the stock market are a direct derivative of patterns in human-nature itself. Just as Man repeats his mistakes, just as history repeats itself, we can look to TA as an analysis of human tendency. The stock market is a giant organism consisted of the whims and reactions of millions of minds. It can be studied, and it can be tamed. Only by the hands of the cunning, and the open-minded of course. ______________________________ RocketsPimp, The Chart School at Stock Charts, is indeed informative. There are also plenty of books on the subject. Keep in mind though, as I have mentioned in this particular post, that TA is only a tool. Apply the concepts of Money Management, risk to reward ratio etc. Also keep an open mind when you are inevitably wrong in a trade. Don't be stubborn, and don't force things. Trade to learn, and learn to trade. Whenever I post any new trades, I will be giving step by step instructions for several scenarios that I can come up with. Hopefully you can take advantage. You show a great attitude. This is a Game and we are all players. In fact it is the greatest Game in the world. Good luck.
CXbby Yes, they have to work harder to move the Market in a different direction than XOM is heading. This veers outside of TA, but COP reports Second Quarter results Wednesday morning with XOM on Thursday and CVX on Friday. CVX warned a few weeks ago about some earnings constraints on various parts of their operations, so XOM should have similar issues in their operations. I have gone with the idea that XOM will trade in a range between 75 and 65 until something significant happens to cause it to breakout of that range. If/when it breaks through 75, there is another resistance zone to clear in the low 80's. In regards to the possibility of falling through 65 and then the nearby March low, that always has to be kept in mind. That would imply a P/E of under 9 and it would make XOM what I consider to be bargain priced and not likely to stay there very long. In regards to your observations about the degrees of acceptance for TA, one has to consider it because of the usage of computers in the Market. Even simple things like <i>Opening Gaps</i> that could be filled are something that can be <i>gamed</i> by computers. If crossing a 200 Day SMA is important to many, then there is the possibility that a computer will be looking for that event.
I will continue to follow this thread, but only if you actually give more detail in your instructions. Not knowing the terminology, etc, I can figure it out, but it takes some time. For example: Right, now not knowing all the terminology yet, that takes some time to decipher. I understand your goal isn't to teach beginners, but I'd find a little more of that useful. appreciated!
That's fine. I only update the setups that I am getting into, or if there is something material happening in them. What kind of returns? Absolute? Percentage? Yearly? Monthly? Per trade? I'll just talk about per trade. It is different for each case. It depends on the beta of the stock- the more volatile the more I am expecting to make in terms of %, however the less buying power I will use. It also depends on the setup. Some patterns measure to a ~10% move, some ~100%. Once you get to know each pattern, you adjust your expectations accordingly. In terms of yearly or monthly, I simply try to make the most I can. And that is not completely under my control, so it varies. Although I wouldn't view myself as a trend trader, an active market that is moving definitely helps, whether up or down. It is hard to find breakouts when the market is flat. There are plenty days of the month where I don't trade a single share for my swing account. On other days I manage my positions- I do some things that I don't have time to post on here, like piecing out when a trade is extended, or averaging down when it is getting close to my exit. The rest is just the initial entry, and eventual exit. If you are trading correctly, you should be trading MUCH less doing this than your average "day trader". Since we don't day trade. Not enough. I am a lazy dude. Ideally, I should be spending every waking moment researching and finding new trades. There is money out there, you just have to go take it. In reality, I spend more time researching the Rockets, or playing video games with friends instead. As you can tell by the mere 5 or 6 trades I have posted so far. Why do you think I started this thread in the first place! I figured more heads is better than one. It shouldn't be too much of a problem. By the time I was attending college, I was basically a full time trader. And this was the type of trading that I used to do. Navigating through my classes(the few I ended up going to) and my schedule didn't end up distracting too much from my trading. You won't be able to manage your positions, and you will miss some entries because you won't be there to press the button. However using stop buy orders or stop sell/short should help. This isn't day trading, where you have to sit in front of your computer and watch every single tick. On the other hand, this isn't managing your 401k either.
I suggest reading up on Chart Patterns, Gaps, and Japanese Candlestick charting. The latter is a charting methodology developed in the 18th century by Homma Munehisa, a Japanese rice trader. Beyond Candlesticks is a good book by Steve Nison, detailing its many uses. Stockcharts.com also covers a lot of the basics. See: Mango's previous post.
Thanks for the responses. I wanted to ensure it wasn't even approaching day-trading like activity before pursuing a basic knowledge in the field. I have a classical business background - fundamentals, not technicals. I work with private businesses now, so way way way less liquid and all about fundamentals. But this should be fun to learn. I'm going to read through the stockcharts tutorials - a lot of info there, will take a few weeks+, but will keep following this thread. Thanks.
I will likely be putting on a new trade for tomorrow, so I wanted to get this out tonight. This isn't some great setup. In fact, if you are not in a certain position, you may not be able to take advantage. However it is a chess move that you can add to your repertoire for future reference. ______________________________ As you know, I have a pretty nice position in NVAX, which I recently added to at 3.30. Today it hit a high of 5.23. I took off a quarter of my position at 4.90, it would have been imprudent of me not to. What comes next is anyone's guess. The likely course is a pullback, forming some sort of consolidation. On the other hand it could shoot straight to 10(keep dreaming). Since the first scenario is more likely, I am a bit uneasy holding 3/4 of my original position. However I do think it is headed much higher, if not now then eventually. The solution to this dilemma is the trade I will be making tomorrow, if it presents itself. The absolute leader in the Swine Flu space right now is BCRX. It is up a whopping 156% in the last 10 days. It is by far the strongest stock of the group, and by far the most extended. By comparison, NVAX is up a paltry 46% in the last 4 days, since it initially broke resistance at 3.25. To exhibit the majesty of its advance, here is a chart of BioCyrst: The plan is quite simple. BCRX is far more extended to the upside than NVAX. The effects of this is already showing, as NVAX has outperformed each of the past 3 days, by a large margin. I will hang on to my NVAX long, and pick a spot to short BCRX to hedge myself. If the sector pulls back, BCRX has much more room to fall. If we continue to rally, NVAX will likely continue to outperform. Below is a intraday chart of BCRX for the past 6 days. As you can see, there is Gap support between 10.0 and ~9.5. This will likely be filled soon. My entry for a short will be a break below 10.00. Keep in mind, this sector has been extremely violent lately, BCRX in particular. I will have a tight stop upon any short, and will continue to trade it to re-enter if my initial entry fails. _______________________________ Always keep a watchful eye on stocks in the same sector as your positions. Just as we are now tracking SWHC because of RGR, we want to pay attention to other Swine Flu stocks because of our interest in NVAX. These include: VICL, HEB, SVA, AVII, and the aforementioned BCRX. This doesn't mean we have to trade them, but just pay attention, as they may affect our own positions. UPDATE: Speaking of SWHC, it hit a low of 5.83 yesterday. This is within the range of our entry, however this price was hit on a possible errant opening print, so I doubt anyone could take advantage. I know I didn't. I was however able to enter some at 6.25. This is not the ideal entry price, which is why I only went 1/4 size. Hopefully I can get some more around ~6.0, as it completes the "handle" in the coming days. For this particular entry, my stop will be around 5.50. I know this is giving it A LOT of room, hence the dismay for my entry price. This is also why I only entered a small position. Rule of thumb: if you are not comfortable giving a position the space required, either DON'T GET IN, or downsize. After the "handle" is complete, it should start to rally back up. A break of 7.0 will present us another entry, as either that or 7.5 will be THE breakout of the pattern. Let volume be your guide. Good luck.
Cxbby, what is your opinion on UNG? I've been selling call options on the August strike and collecting the premium. Thus I'm bearish on it technically. What do you think about it currently?
Quick Update: I was able to get my price at 10.00 as BCRX flooded through the fig. That was good for an instant 40 cents. Subsequently, I had limits to short more anywhere from 9.80 back up to 10.00. Fortunately, it retraced back enough to fill most of my orders. I am out of most of it now, 30 mins ago at 9.21. I left on a small portion to keep my NVAX hedged. Overall, it has worked according to plan. RGR had earnings today, which actually prompted it to gap up. Then it collapsed after the open. I got out of 1/4 at 14.50, taking profit. The rest I am out at 12.98. I may regret that since the decline may be due to a single seller, who seems to be done. However the huge red candle that it put in today due to news negates any pattern I was trading off of initially. So even if this eventually rallies back up(likely), the reason I was in it to begin with is no longer present. If you followed the entry I stated in my previous posts, this trade has broken flat. If you got in the price I stated in my initial post, 11.50, it was still good for at least 13%. Not bad for essentially a failed trade. EDIT: 2:47PM BCRX -9.28%, NVAX -0.42% Hedge has worked excellently, as NVAX continues to outperform significantly, for a 4th straight day.
I responded about UNG in my previous post regarding commodity ETF/ETNs. By shorting UNG or USO, you have a slight inherent edge due to the negative monthly roll yield. As for charting, disregard any pattern for UNG altogether. Look at NATGAS futures instead. It has a possible double bottom at $3.25, with lower highs. If it can break those lows, your short looks great. On the upside resistance is at ~$4.60. Which strike price are you selling?
