Thursday, February 26, 2009

Taking Stock: Trading Patterns

There are a few well-known trading patterns:

I came up with a new one recently, which I call the Bearish Cliff Pattern. We had one in the major indexes in October & November of 2008.

Monday, February 23, 2009

Taking Stock: Trading Possibilities

I was also looking at CE Franklin (CFK) to make some trades. If it bounces off of the 20DMA, then I'll have two data points for both support and resistance on the uptrend. That would allow me to trade it in a channel.

I'm not sure about Compass Minerals (CMP) yet. As Dan Fitzpatrick says, "Don't be the first one out of the foxhole". It needs to start to bounce before I can put in a limit order and a trailing stop loss order. It looks as though $65 is the resistance level for Compass Minerals (CMP).

I am happy to see that DryShips (DRYS) could finally be starting to move higher again. I'm not sure of the proper name for it, but there is an overall long-term trend line that was serving as a severe level of resistance, and DryShips has broken through it. I also read a message board for DryShips, and I have noticed that quite a few other people have lost a substantial amount of money. It seems to be a common theme.

Jim Cramer was recommending Axsys Technologies (AXYS) not long ago. That's funny, because I was considering shorting it, considering that it is is a well-defined downtrend.

There's an article about the DJIA possibly being overhauled.

The DJIA broke another level of support last week. So far, at least from an empirical perspective, it doesn't seem to be a broad-based sell-off. It just seems as though positions are pulling back to the most recent support level. That is part of the reason why I am interested in the overhaul of the DJIA. I was somewhat shocked to read that GE is down to single digits, but I have heard that it is being grouped along with the financials. It is a similar situation to Wells Fargo (WFC), which is getting dragged down because it is in the index along with other financials. Wells Fargo is actually one of the better banks right now, because they did not participate in the sub-prime "give a loan to anybody that wants one" frenzy. Yet, since their stock is grouped along with the stock of bad banks, it will be dragged down along with them.

On that note, there is a good playlist of videos to watch on the credit crisis.

Since the broad market has broken support, I'll put in some stop loss orders for the previous support levels of stocks that I own. Once support is breached like that, then who knows how much lower it will go.

Thursday, February 19, 2009

Taking Stock: Breakout Fakeout

Well ... so much for the supposed breakout! Instead, the broad market sold off to new lows. There has been some discussion about some of the DJIA-30 components being replaced with some new ones, which should be interesting.

As of late, I have just been looking for some trades, and to implement the guidelines that I have learned from watching Dan Fitzpatrick's videos. One of the stocks that I was looking at earlier today was Compass Minerals (CMP). It looks to me like it has a nice trading range/channel.

I was reading another article about Boeing being in production of the 787 Dreamliner. I also noticed that Airbus is in production of their A380 jet.

I am a little wary of Transocean (RIG) at the present time, because it normally trades dollar for dollar with the price of oil. Oil is ~$40/bbl, and Transocean is trading up ~$60/share. I put in a stop-loss order at $55/share as a precaution on the divergence.

Wednesday, February 4, 2009

Taking Stock: The Current Theme

The curent theme now is, as Dr. Leeb has been mentioning for months, is an impending breakout of the broad market to the upside due to inflation/reflation.

Check out Dan Fitzpatrick's free chart of the week and you will see what I mean.

I love it. That's what I have been waiting for for a few months now. It is a good scenario for precious metals and other commodities. I have also noticed that the earnings reports for quite a few of the companies that I have shares in will be repoted in the latter half of this month, which I am looking forward to.

The Baltic Dry Index moved to the upside by 168 points today, which is great for DryShips (DRYS). The CEO of DryShips, George Econonou, managed to get the debt covenants reworked with a better deal than what he had before. The stop loss that I had put in was executed, but I ended up buying it back for $0.40-$0.50 cheaper than what I had sold it for along with more shares than what I had before. The BDI moving up with leaps and bounds is a great catalyst for DryShips (DRYS) and dry-bulk shipping in general.

Great news from Boeing regarding the 787 Dreamliner. Granted, they are only for testing, but at least they are in production now. Now I am anxious for the earnings of both Hexcel (HXL) and B/E Aerospace (BEAV) to be affected by the production.

Monday, February 2, 2009

Taking Stock: Retest, Redux ... again

Looks like we had ... well ... another retest!

Wells Fargo (WFC) has a definite bull flag pattern developing.

I'm glad I sold Axsys Technologies (AXYS) not long ago, because it has now fallen through support and going lower.

Transocean (RIG) appears to be finding support on the 50DMA now.

I put in my limit order for DryShips for $3.50/share. There is no news for as to what the CEO, George Economou, is going to do about the credit predicament that the company is in. So, I'll have to watch to see of I get my order filled, then subsequently put in a stop loss order just below that price. The BDI is still moving higher, which is now up to about 1,100 now. So, the fundamentals for the company are still strong.

Good news in regards to B/E Aerospace (BEAV), since they had a good earnings report. They should now be in a stronger uptrend.

NovaGold (NG) will probobly retreat to the 20DMA before moving higher again.