Bought some JOBS today, just a test buy. Maui had it back on the 17th,
and it's moved nicely. In fact, it had a breakout day yesterday after a
little handle formation.
And ABAX seems to have weathered the earnings storm and regained all its
lost ground so far this morning.
So, for the first time I have a stock up over 20%--actually 2 of them:
ERS & AP. So here's the dilemma, what to do about it?
Everything I've been reading says that the biggest problem traders have
is selling winners too soon and holding losers too long. So I should
keep them.
But IBD says that if you're a beginner or in a dicey market, consider
selling when your stock gets up 20-25%. So maybe I should sell.
But IBD also says that if your stock goes up that 20% in less than 4-8
weeks, you should consider holding that stock for 8 full weeks because
you might have a really good stock. So I should hold.
I think what I will do is bump my stop up really tight on ERS so that it
will sell at 20% if it falls much. And AP I will let ride and might
even buy more of.
On another note, ABAX has me scared. It dropped 10% today, before
earnings even came out. I had a ~12% up in it, and now it's 0.10 above
my original purch price. Blast. But was that people just trying to
lock in profits, or someone selling that knows something? The #s came
out after close, and they seem phenomenal, and after hours trading was
up. But I'm not sure what the EPS estimates were, or if they beat them
by enough. I'm leaving my 8% stop in there. If it hits, I'm out a lot.
If it moves up, I might buy more.
DW got stopped out at 4% and it continued to fall another $1.50 from
there. It seems to have found support at the 50dma, though, so I will
watch it and see if it breaks out from there. It is still highly ranked
on the guru list.
Also out is JOYG. Man. This thing sank %10 today, from 70 down to 63.
My stop kicked in at $67, down 8% from my buy. I had 4% on DW, but
thought JOYG was strong, so I left it with 8%.
My new test buy is IFO. Got in it Wednesday. I think I will stick with
the 4% stop, as I'm not sure what kind of market this is.
I added another test buy to my portfolio. DW, which is big on the guru
screeners.
I dropped MXO at open at 9.37. It continued to fall.
Also, my stop on NWRE hit. It dipped below the 50dma and I'm out of it
and $442. But I cut it at 15%, which was stupid, but could have been
worse.
After that housecleaning, I decided to plow that NWRE money into my good
stocks. I doubled my holdings in CTRN, which was up 12% for me. I'm
not sure if I should be pyramiding bigger or smaller as time goes on.
This was bigger, so I guess we'll see. I got some on a dip down to
$48.25
I also upped my test stake in ERS to a somewhat significant one. I
bought some more at $39.80, which it hovered around for a couple of
hours. It ended up closing up at 40.99 and is now up in after-hours.
I'm glad I did these things. I've got to learn not to be afraid of
getting out of a loser. Just because I dumped one or two possibly
prematurely early on, everybody says that this is something you must do
without fail. If I would have stuck to 8% on NWRE, it would been $150
less that I lost.
Also, I think on these test buys, I'm going to hold tighter stops, maybe
4-5%. I don't care to hold them if they don't go up right away.
Well, after watching both JOYG and ERS continue to climb higher and
higher each day, I finally decided to try and get in on them. I did it
in a very risky manner, though, buying after open.
JOYG shot up after open, and as I tried to put my buy order in, it was
already dropping. I bought it less than open, but more than close. ERS
I tried to buy using a stop-limit order, not buying unless it went
higher than a certain price, but then I decided to just buy with a limit
at 37. Well, it took ameritrade a while to cancel/replace my order, and
I'm sitting there waiting for it to execute, but the stock continues to
fall. Finally it goes down into the 35s before starting to come back up
and I bought at 36.37. It closed at 38.16. But I have a 4% stop on it
and an 8% on JOYG, which I consider to be less risky. I wonder if that
has any bearing on anything?
Anyway, the whole plan was to do a small "test buy" on each of them,
set close stops, and then buy more of whichever performs better. ERS
had a worse day, but I bought at a better price, so I may have skewed
that experiment. We'll see.
I'm thinking about dropping MXO at open. It's 5% down, and hadn't been
doing much, until two days ago when it shot to 10, and today when it
dropped back down to $9.37.
NWRE I'm not sure about. I have a stop set below the 50dma, but I
really don't want it to get down there. Again, this was bad timing on
the buy. Well, not really, I bought at $0.10 over the pivot, it just
happened to be the high for the day. Anyway, I'm down 11.5%, and
earnings come out next week. I'm tempted to hold it till then to see
what happens. But that kind of stuff is either very good or very bad.
Of course, I've already got my stop set and will lose only slightly
more, but the potential for upside is much greater.
Of course, this goes against everything I've ever read about selling a
stock that is down. Everything (except Cramer) says to liquidate a down
stock. There is nothing that hoping will do. And holding a loser and
having it come back is even more dangerous because it teaches bad
habits. I need to become more unemotional about these things and less
afraid of being down so much. Seeing that $434 that I would lose is
what's keeping me from doing this.
I got out of FTK on Tuesday. I only held it a week, and it was
languishing. I wonder if I sold it prematurely? I've read that once
you buy a stock, you should let your system get you out of it: either it
hits your sell stop or you take profits in it. This one I was a little
impatient with, but I did sell it at a 5% loss, which I think is a good
conservative stop.
A part of the problem was how I bought it, too. I bought it intraday
on a spike during a down day, so I was in a hole to begin with. The
lesson there is place a market or limit order before open.
It has rebounded a bit in the last 2 days, but I really want to have
something break out sooner than that after I buy it. There were a lot
of stocks that went up this week that I could have been in if that $
wasn't tied up in FTK. And IBD says to drop your weak stocks and build
up your winners.
Saw FTK take off this morning from $27.90 all the way up to 29, which is
approaching a new high. I got a limit order in for $28.90, which filled
on the way back down. Another lesson for setting up your trades
before the market opens.
It's back down to its open price now, so hopefully won't go below that.
Dunno, looks like the market's turning down a little at the moment.
Very interesting action by CTRN today. Last night they released some
good earnings numbers after closing at $39.94. The stock gapped up to
open at 43.09 and rose to 46.50 on the day!
Here's what was kinda cool. I bought this stock back on 3/29 at $39.19,
but I only bought 3 shares, or $100 worth. I had read an article about
staging in that recommended for a $500 stake buying $100 first as a
feeler. Then if it goes up 3%, buy $200 more. Repeat once more at 6%.
The idea is that if it tanks, you're only out $100. Anyway, I bought my
3 shares and then put in a buy-stop order at $40.37 (although for 22
shares, so I kinda broke rank with the system there by buying more than
$500 total and not splitting the 2nd piece of the buy).
Well, with this action this morning, my trade entered at open, but it
placed at 43.25 after the gap up past my buy point. The cool thing is
that those 3 shares I had already bring my avg purchase price down to
$42.76 because they were so much lower than the open price today. Cool!
As of right now, I'm up 8.7%. Now I just have to figure out when to
sell this puppy, hopefully after I ride it up a lot more. I'd like to
set a trailing stop, but I think they should probably be set for
15-20%, and I'm not up that much, yet. IBD says that you can expect a
17% pullback, but also that you should never take a loss after having a
profit, no matter how small. So for now I'm setting a stop at $43, to
try and give this thing the room to grow. With the huge volume it broke
out on today, hopefully it will head straight up.
I do think if it hits 20% I will sell. Everything I've been reading
says the biggest mistake people make is selling their winners too soon,
but I think 20% would be a good confidence booster and it's a simple
method IBD recommends for begginners.
Of course, IBD also says that if it climbs 20% in less than 8 wks to
hold another 8 wks, so we'll see. That would be a pleasant problem to
have.
Man, I sold JOYG a day too soon. Today it's up $3.35 (5.59%)
I don't think I would have got out, either, if I didn't have a stop
order in. It closed higher on friday than it dipped throughout the day
and I was shaken out. So, that's another vote for only basing sell
decisions off of close prices.
Of course, there's always the chance that without a stop order, you
could get bit by a plummeting stock.
I'm going to leave NWRE without a stop for now. ABAX has a 20% trailing
stop. CTRN I have both a stop and a buy stop if it goes 3% over my
puchase price.
...for the first time, for the last time.
That's right, I'm back in NWRE. I decided I was either going to put in
a limit order at $27.54 or a buy stop at 30.60 (the new buy point). I
had them both set up in izone, but then thought what if they somehow
both bought while I wasn't looking? So I decided to wait till open.
Right out of the gate, it was immediately at 30.50, so I put in an order
for a limit at 30.60. It climbed to 30.66, then my order filled and it
dropped down to 30. We'll see how it does today. Initially, the market
looks good. I'm hoping for a lot of volume since it just touched a new
high. That will put it on the IBD front page and get it more exposure.
The theory is that we're trying to get a stock before it busts through
the buypoint and becomes an IBD rec. In the past, we've looked at what
IBD had highlighted and seen that we were either already above the buy
point + 5%, so the reasoning is that if you can get it at the buypoint,
you'll have greater profits and less risk of getting shaken out.
Also, I just noticed that JOYG is up $2 for the day, now that I'm out of
it. But ASVI is still languishing.
