I bought some BTU today. It looks like it may have bottomed around 43
and was on it's way back up. As it found resistance at 44, I put in a
limit order for a small buy at 43.80, which filled this afternoon.
I'm not sure this is a good buy or not. I heard about it on a new chat
channel I'm on and the fundamentals look good and the chart looked
indeed like a bottom. FWIW, Cramer likes it, too. So we'll see.
I started seeing buzz for this stock last week. I bought some at open
on Thursday for $17. Friday I started hearing buzz about how it would
make the IBD100 for the first time since it just climbed to over $15 and
then it would gap up on Monday. At that time I decided to buy more and
it was at 19, so I waited and it dipped to 18.8 right before closing at
19.
It made #14 on the ibd100, but over the weekend it lost $1.60 in AH
trading. I'm still not sure why. I guess all the people that bought it
were looking to take profits. It gapped down to open mid-17s and closed
at 17.02, but I didn't sell because I didn't want to break my rule about
intraday trading.
So now what? My stop was supposed to be 17.29, but I removed it
yesterday so I wouldn't get shaken out. I was going to put in an order
t sell at open so I wouldn't get burned, but some folks at Investor's
Paradise said that the fundamentals were still good and that a pullback
was to be expected. I decided to see what Tuesday would bring.
Today it opened even lower at 16.78 and fell to 16.52 at one point. But
it stayed around 17 for most of the morning. At one point it started
running up and I put a buy order in for more at 17.40 while it was in
the .50s and .60s. It fell back through that and filled and then was in
the 17.20s. Dangit. I wondered if I had some kind of deathwish. Plus
I had broken my averaging down rule. Then, I did the smartest thing I
could do: go take a nap.
I came back later and it was high 17s. Later on it was in the 18s and
finished with a strong close for a day's high of 18.75! My acct was
down 2.5R at open to up 3.4R at close. Phew!
I have definitely not done things right here, and once again being lucky
might lead to bad habits, so I'll have to try and be conscious of those.
I have amended some of these. The old rule is still there in red, the current one is 1a, 1b, etc.
1. Don't buy or sell anything during the day.
1a. Buy using limit orders after watching the opening range of the first 30mins or 1 hr after market open. Only buy if it's an up day for the market, and your stock is above the opening range.
2. Use a "mental stop" based on close prices. A tight physical stop will often
get shaken out during the day. A wider emergency stop might be a good
idea, though.
2a. Now when I buy, I put in a physical stop at 3 * ATR(14) below my buypoint.
3. My R is 1% (0.5% in a downtrend).
4. Don't go long during a downtrend.
5. Once you're up 10%, don't take a loss on that stock.
6. At 20% profit, sell half.
7. Stop shorting stuff until you can make money on longs.
8. NEVER AVERAGE DOWN
9. Only buy at a proper buypoint. Ones I will use are cup & handle, double bottom (with handle), 3 weeks tight, and bounce off the 50dma. All these should be accompanied with at least 50% greater than average volume on the breakout day.
10. Don't buy right before or after an earnings release.
11. If a stock does not break out the first day, sell half of it. You only want stocks that are going to go up immediately.
12. Only buy good-quality IBD stocks. They should be above the 50day, have a 50day above the 200day and trade more than 150k shares daily. And they should have a share price above $10.
13. Remember, there is always another stock.
14. Before you buy a stock, know where you want to get in, where you want to take profits, and where you will bail out.
My trading buddy bought SIM at 10.35 and watched it go up everyday all
last week. I thought it looked similar to ERS and IFO (now IFON) when
they topped and told him so. He had 20% profit on it last friday and
was wondering what to do. I suggested selling half. He declined.
Monday it went down for the first time in 8 days on what looked like a
lot of churning, and today the sellers swooped in. He got out at 10.79
and ended up with 4% profit instead of 20. It was brutal, 10% drop.
The lesson here is that if something's going straight up, you better be
careful with it. Don't be afraid to get out on the first sign of
weakness.
Also, I think you have to write yourself notes after something like this
happens to you. Or the next time you'll think, "ah, this is nothing.
Look how fast it's gone up 20%. It'll keep going." or "This might just
be a blip and then it will keep going and I don't want to miss it."
Well, I got stopped out of CTRN today. I had left my stop at 29,
deciding that I would not ride that elevator down again. So I lost 7%,
which is not great, since I had too many shares. It ended up being a 2R
loss on one stock. Not cool, but it could have been worse.
I've done something extremely stupid, once again: buying on the way
down. This time it's with CTRN. It was down, and I bought it at 34,
then at 31, and put in an order for 28. For a while, it's been basing
at around 30, and I thought well, my 3rd buy won't fill and it will go
back up and the biggest problem I'll have was that I didn't buy enough
(greed). Store sales #s for the month and quarter would be released
this week and earnings in 2 weeks, so I was still thinking this was a
good time to buy.
Then it slipped and closed in the 29s for a couple of days,
then dipped in the 28s and Tuesday closed in the 27s (with my buy
filling on the way down. Hrm, be careful what you wish for.
Yesterday it closed in the 26s and I realized that there was no longer
anything holding this ride up. But do I get out now? Do I buy more
lower? I still feel this is a good company with good future growth
(they're going from regional to national), but that doesn't matter to
stock prices. What if this thing sinks to below 20 and languishes
there? Do I want my capital tied up in something like that, hoping that
maybe one day it will climb 50% to what I paid for it?
Ugh. Well, I have been somewhat saved. They released sales #s after
close yesterday and they were good. Sales are up, but SSSs were down
from the period last year. Ruh roh. It seems like lately the market
looks for any little thing to get out (and also there's a lot of shorts
in this float).
This morning I put in a sell stop for all my CTRN shares at 26. But it
went up to 27. Then 27.5, then 28, so I moved my stop to 27. Then it
went to high 28s, so I moved my stop up to 28. It closed at 29.59.
Phew! My stop is now at 28.50.
What I should have done was watch it go down and wait for it to rebound,
then start buying some. As it goes higher, buy more. This was totally
backward and I must not congratulate myself or be so happy about it. I
don't want my brain to think of this as a positive experience and be
tempted to do it again. You would think I would have learned my lesson
with NWRE.
NOTE TO SELF: NEVER, EVER, EVER, EVER AVERAGE DOWN!
Well, I set my stop on SWN close alright--too close. I got stopped out
on a dip early on Aug 1, then the stock tookoff for $3. It's the age
old question of mental vs entered stops. If I want my stop for a
closing price to be 5% to cause me to exit, I should probably just enter
a stop for 10-15% as a safety net.
I just got swept up in the natural gas craze and jumped in and bought
SWN at $35.25, which will probably turn out to be the high for the day.
I also thought about doing a smaller volume test buy, then waiting for a
follow up, but though, "nah, it's up 7% on the day, that's enough of a
signal." I better set my stop close on this one.
I planned to put in an order to buy FUEL at open. 15 mins before open,
I'm reviewing some charts and trying to decide which short play I'm
going to do. As I'm entering my short, I notice it's 8:30, so I put in
my buy limit order for FUEL, but it's already passed my limit. So then
I upped my limit and got it like 1% higher than I would have just doing
a pre-market order. Not a big deal, but it was a stupid mistake.
IBD is saying Wednesday didn't count as a distribution day because the
volume was low. Same thing they said earlier in the week. Their count
is 2 distribution days, but I say it's 4.
I have been scooping up CTRN after it's slide this week. Some at 34.85
and some at 31 today. Totally breaking all the rules, and it will
probably burn me, but it seemed like a good idea at the time.
After we had a followthrough the week before last, I jumped in and
bought a bunch of long positions. This rally has floundered, IMO. I've
been getting shaken out of a few of them, and this morning will close
out a bunch more. 2 things I did wrong:
1. I should have waited for a better rally confirmation.
2. I bought too many stocks at one time.
If I was a true CANSLIM person, I would not be investing at all right
now (and I would still have the profits I made earlier this year). I
realize, however, that I like the excitement of trading. This is not
necessarily a good thing.
Took 2 weeks off from vacation, and then not much was happening when I
got back. I finally started trading again last friday (well, okay, I
bought one stock on Thurs).
This rally is interesting and scary at the same time. Currently I am
taking a shotgun approach. My R value is still $100. I bought a bunch
of smaller stakes that I'm setting stops at %10 on. I've had a few that
I've been shaken out of the last few days.
Current holdings:
green-TIII, SIMC, SKIL, FSII, BMR, SEIC,
red-CTS, PBNY, FUR, FORR, FLAG
Well, for better or for worse, I got back into IFO today with
40 shares @27.5. I hope I'm not just buying because of regret of
selling too soon because I did what I should have done at the time.
Also, Jeff just got some and I hope it's not that I'm just jealous of
him. But it's up and I put a stop-loss order at breakeven, so I'll hope
I can let it ride. I am a little scared that the growth it's
experiencing looks crazy parabolic.
I also decided to buy some more AP after it had a slight pullback
yesterday. It has been very, very strong throughout this crappy market,
so that might be a sign that it's up and coming.
I also covered my last short FCX today for a $100 gain. Not much, like
2%, but after getting shaken straight out of TRAK yesterday, I'm not
feeling confident in shorting. So I'm out of shorts for the moment. I
lost $100 on 2 and gained $100 on one. But I think I learned some
lessons.
Well, since this market has been more down than up lately, I've gotten
into a few shorts. BUCY I got bounced out of pretty quick on an up day
at a 5% loss. FCX and TRAK I still have. I can see why people don't
like to short: it's less reward. Also, it seems like this market is
choppy, so everything's cancelling out. I should probably get out of
both of them at a good spot, but then I'd probably be tempted to do
someting more risky.
My last long is AP, which has had some really strong days lately. It's
also #1 stock in the #3 group on IBD.
Another long I'm watching is NTSC. It's setting some new highs on
pretty big volume, although it's avg vol is pretty low.
Wow, haven't posted in a week and look whats happend. My portfolio
shrank from 10 stocks down to 2:
CTRN-my last half hit a 20% trailing stop and sold at 45.5 (breakeven)
Although now it's back to $50 after earnings.
USB-was lagging down towards my stop, so I sold it for breakeven.
TBBK-dropped way below 50dma. Has recovered some, but not above 50d.
KCS-failed to breakout. Sold at 4% stop. Has continued to plunge below
50dma.
IFO-sold remaining half Monday on HEAVY bounce. It has rallied back
some, but closed the day down hard today after being $2 up all morning.
This was a fun ride. I closed the 2nd half of my stake up 35%! At one
point it was up 50%, a first for me.
DIL-sold remaining half after 2 down days on heavy vol. It has
continued to trend down.
FNSR-closed below 50dma. Still down there.
DTLK-failed to breakout. Still down.
So, as you can see, this selloff has been pretty brutal, although I feel
I've handled it very well. My portfolio is down about $500 from it's
peak, but that really happened before I could get out of most things and
was a consequence of trying to give my winners room. I'm still up 8%
overall, which I think is pretty good for 2 months of trading. And this
correction was a good time to do housecleaning. I'm glad I did.
Everything I got out of was weak and is worse off, except CTRN, which
has rebounded.
However, I'm not totally out, yet. I still have half my AP stake, which
hit a new high today! And it did so on the highest volume since the
breakout. There may be better things yet to come for AP. Also, I'm
still in AOB, currently up 8%. It seemed to have overhead resistance
today and was up in the morning and closed slightly lower, although that
is par for the whole market today.
General consensus is that there's more selling ahead. Should be
interesting to see how the week closes on Friday.
Oh yeah, and I got out of ABAX after that whole earnings rollercoaster.
It dropped way down before earnings, came back up the following day, and
dropped again the next. I scaled 25% of my shares at an 8% gain and the
rest at a 6% gain. Not much, but I didn't like the look of the high
volume selling days with a lower volume gaining day in between them.
CTRN gapped way up this morning. I put a limit order in to scale out
half my shares at 25%, but just missed it and it fell back a couple
points and is now up 3 for the day. I'm not sure if this is a good gap
or something to be worried about, yet.
I also picked up a small stake in AOB this morning. So unless something
sells out, I'm fully invested right now.
So I've read a lot about scaling out of stocks lately. I already
started implementing it. One site I read recommended scaling out of 1/4
of your stock each time it reached a profit level. As an example, they
gave 6%, 18%, and 32%, and letting the last 1/4 ride. That might be
okay if you had large positions, but I think for my account, the
commissions would eat me up if I split it into that many trades.
Instead, I've decided to scale out 1/2 of my shares if I reach a 25%
profit point. As I get bigger positions, I might split it more, but I
figure for me being a newbie, and this being a sideways market, it's a
good way to lock in some profits, but not decrease my winners too much.
I already took profits in AP this way. Also, I got completely out of
ERS on a down day last week, for 25%. Of course, today it's up $5 and I
wish I was still in.
I've also decided to not do scaling in. I was watching maui picks and
buying some test lots of them, then buying more if they went up 3%.
Then I thought maybe I'd just wait and buy in if it went up 3%. I did
that with JOBS, but it turned out to be too far away from the buy point,
and I got shaken out today.
So I do have a couple of remaining test buys in DIL and TBBK. But I've
also done significant buys of KCS and USB.
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.
