Sunday, September 18, 2011

Profit from a good week

Wall St. expected to open lower last Monday, instead stayed down 1% to unchanged until the last hour were we saw a 20pt ES ramp, starting a week-long 55 ES pt churn higher. This was the best week for investors in almost 2 months, but are we out of the woods just yet? From chart patterns, I can see that we are still stuck in this range that has been hard to get out of since early August. The ES bounces between 1,120 and 1,220, then if broken through those levels, we see huge volume spikes, and movement back down to the range again. Since end of August, we have held that tight rage. The ES seems a bit toppy here around 1,220 though with Europe always in the rumor mill, a lot of hot air can push this up or slam it down at any second. Breaking above the R3 pivot (1,234) is key for those of you who are bullish.

Notice ES range still staying very tight with this near 5% move up last week.

I was very busy at the desk last week making 3 different trades, 2 of them doing well and the 3rd looking for an exit point this upcoming week on a minimal loss. Intraday Monday, National Bank of Greece hit a new low at .76, looked like a buying opportunity for a quick in and out bounce. Bought 500 @ .78 shot up to .82 Tuesday, but hung on for one more day till end of the day Wednesday and sold there around .95 or so. These European banks, especially $NBG are huge rumor names and just by looking at the chart and hearing the news, something might be getting done. Investors flocked to bid it up huge but then knocked it down again Thursday and Friday.

Chart above shows $NBG breaking down through S3 but then the last green candle on the line showed a bid up.

Another trade on the whim was PMI Mortgage insurance. These bond insurers and the line have been total dead money since Ambac’s collapse 4 years ago. Was looking at the S2 pivot on this name and seemed to bounce off it nicely. I literally had no idea what I was getting myself into, but this trade was pure luck. I bot at a .2 limit early Thursday AM and sold it when it scraped .27 on a nothing but hot air bounce.

$PMI seems to bounce off .2 rather nicely, if it dips again, I may put the money to work for a quick day trade.

Third and final trade was a hail mary pass that sort-of failed on Friday. Via Brenna Hardman (@RMBrenna) on twitter, I got quick word that $YRCW was stopped, took a look and it was down 70%+ , a definite circuit breaker to say the least. This Trucking company has basically dealt with bankruptcy and now got a second notice for a de-listing from the NASDAQ. They will convert their preferred shares and all other shares in the company to common leaving about 1.9B shares outstanding vs. current 47M now. It has been trading under $1 for quite some time now, even after its 1:25 split last October. Honestly, I thought 70% was a bit overdone, and that some bidders might bring it back up a few cents before closing down hard. I was about half right.

$YRCW Initially was trading mid .20’s then got a huge sell order for .11 got a bid to .17 then another slam back to .09 and a grand finale (which I thought was day’s low) to .08 I bought 2,000 @ a .09 limit then watched it tick up to .14 by midday, would have been a nice profit, but ended up losing $40 when it closed at .07; looking to hang onto it through this week to see if it can make its way back to that level again. Huge volume on this name by the way, traded through the company 7x (353M shares; 5-10M on a normal day)

Earnings front this week looks rather busy, but I only trade stocks under $15 (A college student w/o the $$)

Looking at $AZO (would never trade, too expensive) but this company is a monster. All-time highs basically everyday, very good recession name, people keep buying parts for their car to keep them running, rather than outright buying one. Expect some profit-taking on the report, stock is up 20%+ in a month’s time and they usually sell-off on the report a bit, but then get right back in for the ride.

One I’m looking at this week is Rite Aid $RAD. If I can get it for the right price, this could be a winner. Looking at q/q, although still a loss, it was cut down almost 75% from 205M in Feb from 63M in May. Expected earnings are (.17)/share.

If $RAD can make it’s way to between $1-$1.05 that’s the sweet spot.

That’s all everyone, have a good week ahead, get at me @peter_eller10 on twitter if you have any questions.

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