That said, we still want to make excursions in stocks we like, and the trading has been exquisite the past 3-4 weeks. Moves are so sharp (huge % moves in 1-3 day periods), and charts are being obeyed as everything is so technically driven of late. We've been trading A-Power Energy (APWR) heavily of late since the moves have been quite nice, and our last exit was way back... Thursday [Dec 18: Another Layer Out of A-Power Energy]
Exciting move out of A-Power Energy (APWR) today, up yet another 15% today on half its daily volume (in the first 1.5 hours). It is now hitting its long term resistance (50 day moving average).
....but we've been content to trade it in a range until it proves it's ready to stop being stuck in said range.
So true to form the stock hit resistance and fell back; I actually cut even more as the stock failed $6 and we went into the week down to a 0.8% stake. The stock is down 11% today alone so we'll begin to redeploy back into the name, but allowing for a move back to the upper $3s/low $4s if the market returns to reality in the coming weeks. I will continue to trade this wide range (upper $3s to 50 day moving average, currently $6ish) until the stock proves it is ready to make a move above resistance. Even if I think fair value is much higher. This will be the correct thing to do, until it is not. Follow the pattern, until the pattern changes... one time it will be wrong to sell at resistance... but each time up to that one time, it will be correct.
We're back to a 2.0% stake, replacing the shares we sold in the $5.90s, here in the $5.20s - 2 trading sessions later. I really don't want this position at less than a 2% stake at any time, but the technical set up just screamed "sell" so we dumped a lot of the position. We'll release the shares bought today if APWR gets back to $6.00 until the stock proves its ready to make a sustained run, and keep repeating. Rinse, lather, repeat - until a real move happens.
We're not playing big since believe me, all these bottom callers who have ONCE again emerged will go scurrying back into their holes if the market breaks down - along with the whole "it's all priced in" crowd. By the time we get to March or April's employment report I doubt "it's all priced in" will be so. That said, I expect some seriously wide swings in 2009 as we ping pong between reality and hope, and most of our major purchases want to be focused during the times of despair (reality). But we'll trade around a couple of names in the interim. (this is actually a fantastic environment for those trading around positions for a personal account - hand raised. But nothing to see here for "investors" - move along)On the S&P our first support level (S&P 870) is being tested and thus far holding; again we won't read much of anything into this week as much of institutional America is off Christmas shopping. Below S&P 820-840 we are bears, above S&P 940ish bulls, in between we're cash heavy and neutral, while trading the gifts the market gives us every 48 hours (huge swings in individual stocks)
Long A-Power Energy in fund and personal account
6 comments:
Why do you use the EMA moving average over the SMA moving average?
For example, I just bought some EXP, an infrastructure Obama trade, it is pulled back to it's 50 day SMA, but is below it's 50 day EMA
FYI, Dow Jones Newswires put this out today:
A-Power Cut To Mkt Perform From Outperform By Raymond James
dc, TA is as much art as science. There is no "right" line to use. EMA has worked for me much more than SMA over the years so I use that. Others probably find the exact opposite. TA is just a guidepost or another tool to supplement. Nothing is fool proof or near it, we just try to have odds in our favor as much as possible and any form of TA helps to a degree.
Nos, not too worried. APWR is pricing in pestilence and famine at 3,4,5,6. Its a trading vehicle until it can break out. Very little faith in the company as evidenced in any stock price for APWR below 15.
Thanks, I enjoy the site, am a daily reader. I get more and more angry by the day about what is happening with the banks, and taxes, it's outrageous.
the more people that know the truth, the more it will spread
If I had time I'd devote a full blog to how the govt and their tiny niche of society work to screw the vast majority. I read things every day that I don't post here since it doesn't apply. I am just posting the "economic" specific stuff. It is pretty sad really for the entire country that this is the system.
I looked at EXP chart and it broke its 50 day moving average, low $19s, last Thursday. At that point I'd be a seller, not buyer. The chart is not in good shape. I realize Obama is Midas, but unfortunately many stocks going up of late are doing so on nothing more than Obama. It does not take much to change that viewpoint and the stocks then have no fundamental reason to be bought.
That's the problem with buying on "thesis" over reality. One we pull back the curtain the Wizard of Oz is not so impressive - thats the story with almost all of these stocks going up on hope.
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