Tue Apr 30, 2013 8:54pm ESTComments Off on Today Portfolio Adjustment (04-30-2013)
Today was a big hug and a slap on the face.
Market was down in the morning but I seemed to pay less attention to what $SPY was doing these days.
My focus was on $GLUU and $BCRX.
$GLUU opened a little bit higher and I felt the urge to buy back my shares. I noticed that even though yesterday was a down day, it still has a higher low compared to the day before. With this kind of thinking, I decided to buy back $GLUU with a stop below yesterday low which was a low risk trade for me. By end of day, I was not stopped out.
$BCRX was acting strong and I added twice during the day. Somehow, the momentum went out of gas but price still closed above $2.00. I’ll decide what to do with this one tomorrow.
After browsing around the watchlist, I decided to buy starter position on $DNDN and $DNN. $DNDN because the chart looked bouncy and $DNN because $CCJ was up at the time and the Russian supply of military grade uranium for conversion to commercial use would cease to be available sometimes in the 2nd half of the year. I later added a bit more to $DNN.
$AMRN was going strong all morning and when it took out the high made in April 23rd, I added a bit more to my swing trade position.
$AAPL was doing great so I left it alone.
$SZYM was on a defensive all day and I wasn’t thrilled about the price action at all. I sold out my position two days ago to lock in some nice gain but then I felt the urge to buy them back. Now I have to deal with this correction all over again. Why did I have to buy them back? Why? Why? Ok, enough of my whining. Sometimes, I’ve to let my ego complains a bit so that it can settle back into the background. (grin)
$MELA. Mela, Mela… what’ve I done to you that you’ve to slap me on the face? Before closing, price dropped quite a bit when I wasn’t looking. However, after I was made aware of it, I dumped 50% of my position to cut my losses. With the earnings numbers out, after hours price tanked quite a bit. Somehow, I thought their business model was starting to kick in gear. Depend on price action tomorrow morning, I may just buy back some share for intermediate term hold. Let’s see how it goes tomorrow morning.
Tue Apr 30, 2013 2:01pm ESTComments Off on Calling a bottom here
Most of you all know that I’m long $AMRN from last year and have to sit through the drawdown all because FDA could not decide on the NCE (new chemical entity) status on the almost pure EPA chemical ingredient in $AMRN’s new drug Vascepa. Month after month of no approval and with $AMRN taking the path to self-distribution of Vascepa instead of going thru the Big Pharmaceutical company, price continued to head south. It was because I did not average down during the drawdown period that I could tolerate the temporary setback on my long-term position trade.
As in any price movement based on human emotion, there will come a point where a bottom or a top can be called on for a speculative play. What most people don’t realize is that while picking bottom or top can be akin to playing with fire, it is actually a low risk trade if you’ve done your homework correctly. Please refer to my past post on the art of catching a falling knife.
Remember this stock market wisdom- Buy low and sell high?
How do you propose to buy low when you are not trying to pick a bottom?
As I mentioned before, the only way I will add to underwater long-term position is when I play the added shares as a swing trade. Meaning that I will have stops in place to protect myself if price head the wrong way. These stops are non-negotiable; otherwise, I’ll just be kidding myself into averaging down to my core position.
Last Tuesday when $AMRN announced the FDA has accepted its Supplemental New Drug Application (sNDA) seeking approval for the marketing and sale of Vascepa(R) (icosapent ethyl) capsules for use as an adjunct to diet in the treatment of adult patients with high triglycerides (TG >=200 mg/dL, price gapped up but turned around and headed south for a few more days. I knew then that the bottom was about to set in. While we won’t hear from FDA regarding the approval of this sNDA until Dec of this year, it is considered a game-changer catalyst that can propel $AMRN to be a very attractive take-over target.
There are support level from Dec 2011 low of $5.99 and price last week has dropped down to low of $6.34 before heading back up. While I didn’t buy the swing trade position at the low, I bought them around $6.4x. The way I see it, the risk/reward for the swing trade is excellent. My stop was below $5.99 and I’m only risking about $0.45 cent per share for a return that has the potential to be multiple times of the risk.
Below is the weekly $AMRN chart. Notice that last week bar is a doji. A doji at the bottom near a support has a high probability of forming a bottom.
Below is the daily $AMRN chart. Notice that today price action has penetrated the downtrend bar.
Needless to say, I’m close to double-up my position on $AMRN with my swing trade position. If price never look back, these swing trade position will become part of my core position. Perhaps, this drawdown is really a gift in disguise for me…
Mon Apr 29, 2013 4:48pm ESTComments Off on Today Portfolio Adjustment (04-29-2013)
Today was a problem-solving day.
Not because I had a problem with the market but because I had to solve a non-market problem that took all my concentration during market hours. By the time I solved the problem, Holy Moly! there were only 20 minutes left before market close.
$AAPL opened higher and I knew I had to buy some. The weekly chart show a Bullish Harami and any open higher than Friday close was a buy. Take a look at the $AAPL weekly chart below.
The circle area is the Bullish Harami candlestick pattern. Today price action took out the high of last week bar so the probability of $AAPL bottoming is high. I bought a starter position and left it alone. Later, when my attention came back to the market near the close, I added more $AAPL.
I also wanted to buy back my $SZYM I sold Friday. I started to accumulate shares in the morning and then later in the day. I bought back the size I wanted and is satisfied for the day. Nevertheless, the spinning top candlestick chart formed today was not exactly an endearing pattern I wanted to see. Let’s see if there is a confirmation for a top tomorrow. Spinning top needs to be confirmed with down days afterward to considered a top.
$GLUU gapped up but price began to fall during the morning time. At price got close to the half-way point of Friday bar, I sold to lock in profit. Later, I went back in for a bounce but it was for naught since I was stopped out for small losses from re-entry point.
$RBCN was heading back up in the morning so I added. Seeing that price was doing well in the morning, I placed a stop at breakeven not expecting it to be hit. No! Price had a bad hiccup and went straight down pretty fast and took out my stop and I didn’t even know I was stopped out until half-hour later since I wasn’t paying attention to it. Oh well. Seeing such volatility, I opted to stay away from $RBCN for now.
$BCRX was acting like it wanted to go up so I bought more. I added more later to bring it to the position size I wanted. Prices action went up later so I’m fine for now.
$MELA was having some correction today but I decided to keep my shares since price action hasn’t broken thru the $1.27 support line. $MELA is reporting tomorrow; therefore, I’m basically holding this one thru earnings.
$CERS was showing strength in the morning so I decided to buy a small starter position so I don’t forget it.
Not much going on today since I didn’t have much time to stay with the market.
Sun Apr 28, 2013 1:18pm ESTComments Off on Where Ego Dares #3: Training
My past posts support Osho’s contention that continuous thought creates the mind. And when you have two conflicting continuous thoughts going on in your head, then you have two minds vying for your attention. The battle for control of the two minds is what make an ego.
Ego = continuous thought #1 (mind #1) vs continuous thought #2 (mind #2)
As in any battle, the mind that has the most training will always win. Since we are all by-product of our society, in the absence of new training, our preprogrammed mind will always win. It is the “I’m right” mind. I call it the natural mind because it comes out automatically without any effort on our part.
Preprogrammed mind = Natural mind = Automatic mind = I’m right (or I need to be right)
If our natural mind is in charge while we are trading, then we are “blind” to what the price action is telling us. In other words, what our eyes see and process when looking at the chart or tape is being shouted down by our natural mind.
Your brain processes the price action from the vision of your eyes and give you the following thought, “Whoa! Price is going down like a waterfall!”
“Ignore it! It is only a temporary. Price will go back up because my fundamental analysis says so!” your natural mind shouts at you.
“But I wanna cut my losses!”
“Don’t you dare! I want you to buy more! Average down here ’cause I’m right!”
And so it goes…
And here is the rub.
Most of us are not even aware of this natural mind being our obstacle in the pursue of investment success; instead most of us are looking at the wrong direction. We think that if we have a Holy Grail trading system, our natural mind will listen and obey its signal and we will be on our merry way to being rich.
You see, what you have forgotten is that our natural mind will have no part of it. It will denounce the so-called Holy Grail trading system the moment it spits out some losing trades.
Just by being aware of this natural mind isn’t going to make you a better trader but it is a necessary first step. From here, we need to train another part of our mind to become a winning trader. A mind that is trained in the art of trading to displace our natural mind during trading hours.
Let me give you a parallel example to get my point across.
Before I learned the simple four movement in martial art as I explained before, I didn’t know how to defend myself correctly. Hence, when a punch was going for my face, my natural mind would have me reacted in fear and my body helplessly unorganized to defend such a sudden attack.
In the same token, our natural mind is not prepared to deal with a situation when our belief of the stock is being challenged by price action going the wrong way after our buy order is filled.
After getting proficient of my four martial art movements from weekly practices, my trained mind and body automatically countered an attack before the natural mind even had a chance to get involved.
In the same token, when the stock goes the wrong way after I’ve bought, my trained mind (from the many hours of researching the statistical significance of supports & resistances, candlestick chart formations, moving averages, momentum indicators) automatically executes an order to close the trade to cut losses or lock in profit before the natural mind has a chance to say no. Trust me, your natural mind is very adept in talking you out of taking the proper action to cut losses.
“Are you sure you want to cut losses here? You do know that price will go back up after you cut losses, right?”
The truth of the matter is that the ego is not completely wrong here. Statistically speaking, (even if it is only 10% of the time) we WILL from time to time cut our losses quickly right at the bottom of a correction. And it is from this statistical event that our ego persists in haunting us in order to freeze us into inaction.
By training your mind in the art of cutting losses quickly, which will require a firm commitment on your end, you will transform yourself to cut losses automatically without thinking. Remember, our ego is simply a dominant continuous thought process; thus any thinking on our part will automatically bring forth our ego. Hence, if you can cut losses automatically without thinking, you are way ahead of most traders whose natural mind is their dominant decision maker.
Nevertheless, our natural mind is a very powerful ego and can get really feisty if you ignore it too often. Say you cut your losses quickly in one of those statistical event of getting out at the bottom before market takes off without you, your ego can do seriously harm on your psyche by blasting you with all kind of insult and emotional guilt and pain. After a bout of this guilt-ridden episode from your ego, you may not be so sure about cutting your losses quickly next time.
And this is why it is important that we train ourselves in calming our ego with other form of exercises such as meditation, Tai Chi, yoga, chanting, etc.
Being aware of our ego messing up our trading is not enough, you must know how to cut your losses quickly in spite of the interference from our natural mind. To do that, you must embark on a training like an ambitious Karate martial artist who wants to earn his 10th Dan black belt or someone who want to achieve the highest level of internal martial art like the Tai Chi master in the video below:
Remember, these are just friendly demonstration of the internal martial art. To achieve the highest level of internal martial art, it is not the exercise and practice of the physical movement like Karate but a long and patient practice of cultivating chi. Believe it or not, if you embark on a path to cultivate chi, you are also embarking on the path to minimize the impact of your ego as well since ego can prevent your chi from developing. Thus, practicing Tai Chi is one of the routine I like to keep up on a regular basis.
Fri Apr 26, 2013 5:09pm ESTComments Off on Today Portfolio Adjustment (04-26-2013)
Today was a hit and miss session.
Market opened in a yoyo fashion around the neutral point but that was not my focus in the morning.
I was watching $MELA because I came upon this stock and the chart looked ripe for a breakout thesis. Price opened higher but I still wanted it so I bought at the open and continued to buy at price climbed. I finished buying the position size I wanted and left it alone. As of now, I’m a little bit under water due to its closing. Nevertheless, I’m willing to give this a bit more time before deciding that the breakout is a fake. It is still too early to tell since $MELA was up 6.45% for the day even though I had to pay premium to buy it.
$AAPL was looking strong at open so I decided to buy some for a daytrade. I did not post my entry and exit at twitter since I don’t want to cluster my twitter account with daytrading activities. Nevertheless, I got stopped out for a profit and missed the rest of the rally later in the day. That was fine since I made it a point to stop the daytrading activities once I filled my quota for the day; otherwise, it it so easy to give your daytrading profit back when you over-trade.
Next, I saw the negative opening range on $PPC and $YGE and decided to sell them for small losses. Dumping $PPC was the correct move but not $YGE since price turned around and ended up positive for the day. But then, it is always so easy to judge yourself with hindsight information. There are still time for me to get back in $YGE if next week provides a supportive market condition.
$RBCN was taking heat on the get go and I sold some shares to lock in profit. Later, when prices tanked further down to the low $7.3x area, I bought back shares for the bounce.
$DNN was having problem coming back to the surface for air so I dumped it to take my losses.
$SZYM opened up and I was elated; but it was short-lived. Prices started to tank back down and I sold my shares along the way to protect the profit I made yesterday. By the end of the day, I bought back 10% of what I came in from yesterday and price was actually closed up for the day. Do I wish I sit on my hand on this one? Yes! Again, it is hindsight talking. I’m fine with what I’ve and the profit I’ve locked in before the weekend. I will evaluate my option again come Monday; perhaps, i can buy them back cheaper, or not.
Something told me to buy some more $BCRX and I did.
$GLUU made me a happy man today because prices finally rallied per my intuition. The premium I paid to buy back yesterday after I sold was worth it after all.
$AMRN also made me happy because I didn’t have to dump my swing trades I added this week. In fact, I like to keep my swing trades as part of the core position. This can only happen if price do not trade back down below my swing trade entry point. I will like to see a V shape correction on $AMRN here.
Meanwhile, I’m sitting on 42% cash to prepare for a possible bad May.
MELA Sciences, Inc., a medical device company, designs, develops, and commercializes a non-invasive point-of-care instrument to aid in the detection of melanoma. The companys principal product, MelaFind, consists of a hand-held component that employs high precision optics and multi-spectral illumination; a proprietary database of pigmented skin lesions; and lesion classifiers, which are mathematical algorithms that extract lesion feature information and classify lesions. Its hand-held component emits light of multiple wavelengths to capture digital data from clinically atypical pigmented skin lesions, which is then analyzed utilizing classification algorithms trained on its proprietary database of melanomas and benign lesions to provide information to assist in the management of the patients disease, including information useful in the decision of whether to biopsy the lesion. MELA Sciences, Inc. offers its product to dermatologists. The company was formerly known as Electro-Optical Sciences, Inc. and changed its name MELA Sciences, Inc. in April 2010. MELA Sciences, Inc. was founded in 1989 and is based in Irvington, New York.
My 2 cents.
This is not a recommendation to buy but simply my documentation of why I bought this stock.
Thu Apr 25, 2013 4:26pm ESTComments Off on Today Portfolio Adjustment (04-25-2013)
Today was a sit on your hand day.
Market opened up and my focus was immediately on $GLUU since $ZNGA gapped down from earnings report. After a few minutes, I decided to sell $GLUU for losses in case price decided to do a waterfall style and I didn’t want to tie up my focus on $GLUU when I should be looking at other stocks. Later, when $GLUU started to climb back up, I decided to jump back in and paid a premium for it. Oh well, if $GLUU could take off from here, the premium I paid now would be a small token.
Since there were so many talk about solar stocks coming back into the limelight, I decided to look at $YGE which was an alert from RaginCajun. I also traded $YGE long time ago so it was natural for me to pick $YGE as the solar play. Chart looked good and I bought a starter position.
$BCRX was taking heat all day due to failure to foll0w-thru with yesterday big momentum day. By the last hour of the trading day, I decided to reduce the position size to adjust my risk profile and to cut losses.
Seeing I was sitting on a very nice gain on $SZYM, I was getting a little concern about a late profit-taking coming later to erase my gain. So I decided to take some profit first and see what happened later. What happened later was that instead of profit-taking, there were more buyers coming in to rally the price further. Seeing that I was wrong, I immediately jumped back in and bought back the shares I sold earlier. And at price continued to rally toward the close, I bought some more. Now I’m holding more shares than this morning before open. Yes, I paid a premium to buy the shares back. That is the price I’ve to pay for playing safe.
Seeing $RBCN gunning for a late run into the close, I added more shares. I like to hear the squeaking sound from the shorts…
The charts on $CHK and $WPRT were doing a downside reversal later in the day and I decided I didn’t want to waste time managing these two stocks anymore; therefore, i sold $CHK at breakeven and $WPRT for a small gain.
I need to learn how to sit on my hands more so that I don’t have to pay premium to buy back stocks like $GLUU and $SZYM. But my internal urge for safety can be very overwhelming sometimes.
Oh, btw, $AMRN did not take out yesterday low, so I’m content to continue to hold on to my swing trade position I added yesterday.
Thu Apr 25, 2013 3:07pm ESTComments Off on Nanotechnology – our emerging tech to replace science fiction
I’ll let the charts tell the picture.
Below is the weekly chart for $PXN (ETF for Nanotech)
Below is the weekly chart for $TINY
Notice price was bouncing off the floor.
Below is the daily chart for $TINY
There are the usual resistance; but in time, you cannot avoid the emerging of the nanotechnology to change every aspect of our technological life. There is a new tech world out there that will bring science fiction into reality sooner than we think…
Disclosure: $TINY is in my long-term position portfolio.
Wed Apr 24, 2013 5:10pm ESTComments Off on Today Portfolio Adjustment (04-24-2013)
Today was a happy shopping day.
Market opened positive but slid into yoyo action b/w positive and negative during the first few hours.
Meanwhile, my first order of business was to watch $AAPL. I had my position that turned from a healthy profit after earnings announcement into a loss before market open this morning. Instead of dumping at market open which is my usual MO, I decided to wait and find a point to put my stop loss below overnight or intraday low. Lo and behold, $AAPL took off after a few hiccups and I immediately moved my trailing stop along so as to protect myself from any sudden downside reaction. Luckily, price continued upward and I used the 3min chart to guide me on the trailing stop. By the time I was stopped out, not only did I not have to take a loss but ended the day taking home a decent profit. Afterward, I left $AAPL alone because this stock still has issues for people to deal with.
$AMRN was my other stock I was keeping a close look because I bought add’l shares for my swing trade yesteraday and I didn’t want it to exacerbate my current drawdown. Unfortunately for me, prices continued to head south so I dumped my swing trade position plus some that would reduce my core position by 30%. I then watched $AMRN to settle down on the falling prices. When it looked like it was about to bounce, I pounced back in. I bought back my 30% and later on added more at price seemed to stabilize. Yes, there are shares that are meant to be swing trades in the portfolio.
I moved my stop on $GLUU to breakeven since price took out half-way point of yesterday bar. I was stopped out. Later, when prices looked bouncy, I bought back half the shares. Near the end of day, prices were showing strength so I bought back the other half I sold earlier plus some. I added more because today recovery strengthened yesterday breakout pattern.
While watching $AAPL and $AMRN in the early morning hours, I also paid attention to $BCRX. Although price action had not taking off at the time I was watching it, I sensed the underlying energy behind $BCRX and I just had to buy it. Without hesitation, I bought some and when prices started to move, I added more. I kept on adding until I got to the position size I wanted to be in. I didn’t hesitate because the chart looked mighty good on the symmetrical triangle breakout.
Meanwhile, I was happy to see $SZYM price action staying above the $8 price support. As price continued to struggle b/w $8.08 and $8, I continued to watch. The next time price get near the $8.08 again, I added to my $SZYM position. Price did not start the strong rally then but I l was too occupied with other stocks that I left it alone. Lo and behold, $SZYM turned out later to be one of the strongest stock to rack up a nice percentage gain (the other two are $BCRX and $RBCN). I was glad to add $SZYM.
I saw $CHK chart and price action broke out of the downtrend line so I bought a starter position.
Later, I also bought $WPRT to complement my purchase of $CHK.
Seeing $CCJ had a strong rally, I decided to buy $DNN instead since it has a tendency to run faster than $CCJ.
I saw The FLY post on $RBCN and decided to look at the chart. I like what I saw and bought a starter position. Later on, seeing that prices weren’t retracing much, I decided to add more instead of waiting around for a cheaper price.
Vertigo alerted me again on $PPC and after watching it a bit, I decided to buy a starter position. The size is smaller than the first time I bought not too long ago. I wanted to see if there is any follow thru before adding more.
All in all, today is a good day for my portfolio with $SZYM and $BCRX gaining a lot of ground for me. Because I got in late on $RBCN, I will have to wait for follow-thru price action to rack up gain. I’m satisfied with my new $AMRN position size and look forward for price action to bottom out from here so I don’t have to pare down my position size on $AMRN to get rid of the swing trade.