As advertised late last night, I’m here to talk about stocks this evening. Let’s get right to it by taking a stroll through some thoughts regarding my portfolio.
We’re 11 days into the month (roughly the mid-point), so now is an apt time to provide an update about my initial foray into the seasonality strategy outlined here. 10% of my account equity was spread evenly among three stocks. Those stocks (cost basis) are listed here:
- $CVD (46.36)
- $ETP (43.45)
- $ICLR (21.49)
As of the close on Friday, all three were under-performing the MTD performance of $SPY, so that is a little discouraging, but I’m not going to start hastily instituting changes after 11 days.
I’m holding all positions until they appreciate 3% from my basis or the last trading day in June, whichever happens first. Obviously the idea is to create consistent 3% monthly returns, with the realization that over time they will be more in the ballpark of 1.5-2%.
A personal goal of mine is for 2% monthly returns on total account equity, so anything I can do to contribute to that effort is fantastic.
In other news, I currently hold the following positions (by size): $MO, $THLD, $SAVE, and $XLF July 14 calls with a 22% cash position.
$MO is currently (and will always be) a runaway winner for me. Right now it constitutes close to 25% of my assets. After going ex-div last week, my cost basis is down to 23.95.
Nevertheless, I’m at a crossroads with this position. There are a number of stocks that I like and am watching pretty closely, therefore I need to either a) raise more cash to buy them or b) go on margin. I’d like to avoid the latter if possible. Every time I have thought about selling some of this position to raise cash, my reluctance has been rewarded.
This recent move does seem to be a little overdone, especially if money is going to start flowing into riskier securities in the coming days.
Or maybe this thing going ape is a ‘tell’ for where the money is actually going. We will see.
I have been on and off the $THLD train for the past few months, building a position near the bottom of the range, selling out of 2/3 of it near the top of the range, then repeating that same process. As of last week, I’m on round three of this adventure with a current cost basis of 5.96. My stop is right around 6, so this trade is going to be somewhat successful even if this latest round of buying flops.
Over time, I have learned to be weary of the long consolidation pattern that seems to be forming right now. Breakouts are beloved by many technical traders; however I have found that breakouts from these long consolidation patterns often are initially in the opposite direction of the eventual move. Since my buying strategy is more anticipatory in nature (versus reactionary), I usually get shaken out of these trades even though I was properly speculating the eventual direction of the move.
I opened a position in $SAVE right before the close on Friday. This trade was based on a pattern being formed on the weekly chart of this stock. There are others that I am/was keeping an eye on, but I kept coming back to this one. My stop is below the lows of last week (17.30′s), and I’m taking a 1.5% portfolio risk with this position. I’ll be watching to see what prices do as they approach the 20 week MA around 20.25, but I’m in this with the expectation that it goes to new highs (25+).
As for the $XLF July 14 calls, this trade was made based upon an oversold condition flagged in The PPT last week (with favorable results). I took a flier on these contracts with a 2% portfolio risk. I’d really like to see a pop over the 14.50 level as that would make it much easier to take partial profits on this position in an effort to lower my cost basis from it’s current level (0.53).
I wanted to delve into some of the other stocks that I’m keeping an eye on based on the weekly charts, but that’s going to have to wait for another post. Hope everyone had a good Father’s day…I did.
My best to you all.