Archive for January, 2010
Is NFLX Leading Again?
January 12, 2010 at 7:46 am
With new highs being hit almost daily in the market, there has been an abundance of long-sided trade candidates. However, weak stocks are still in our midst, and it can serve us well to watch for those outliers – whether as individual profit vehicles or simply as hedges.
NFLX is one such stock. Not only did this one prove to be a market leader when it began trending higher a few months prior to the market turning the corner (NFLX in late 2008 vs. the market in March 2009), but it’s now trending lower while the market continues to climb.
A pair of lower highs has been established since November, and currently the stock is struggling to reclaim recently-broken support. The bounce of the past few days is now starting to create a rising wedge pattern which, if confirmed with a move back under the $52.50 area, could bring another breakdown for the stock. If it does, this one is on my radar for a play.
Here’s a closer look for you:
Trade Like a Bandit!
Jeff White
Are you following me on Twitter yet?
I See You PCU
January 11, 2010 at 7:26 am
Strength in this market has been relentless, and that means many individual names are riding the wave. It can be difficult to work through robust watch lists in search of great plays, but often times it boils down to identifying the most valid levels, knowing if they’re violated that opportunity will emerge.
Last week, PCU “got on its horse” for several days and made a nice move right to upper resistance – a well-defined level it has flirted with several times in recent months. It’s now threatening a breakout, but will need to punch through the $36.50 level in order to pull it off. If it does, this one is on my radar for a play.
Here’s a closer look for you:
Trade Like a Bandit!
Jeff White
Are you following me on Twitter yet?
Video Review of the Indexes 1-10-2010
January 10, 2010 at 2:50 pm
The New Year is underway, and it has started just like 2009 ended – with strength.
Last week we saw the bulls get quickly into gear with a Monday morning gap to the upside, sending the major averages back to new recovery highs. Although the follow through for the remainder of the week was rather modest, it was produced, sending yet another reminder that the trend is up and the recovery rally is still very much intact.
As we head into a brand new week of trading, let’s examine some important levels in the indexes to keep an eye on in the days ahead. That will have the greatest influence on how individual stocks are going to move, so it’s where the trading week begins.
This clip was also posted over on the Trading Videos site (as always), and perhaps you’ve seen it there – but in case you didn’t, I wanted to put it here on the blog for you.
Let me highly suggest clicking the “HD” on the video player and then going full-screen for best quality.
Thanks for stopping by and I’ll see you here soon with more.
Until then… Trade Like a Bandit!
Jeff White
Are you following me on Twitter yet?
The Envy of Other Traders
January 7, 2010 at 7:30 am
If you have traded for virtually any length of time, you’ve no doubt found yourself on both ends of the spectrum when it comes to winning and losing.
At times we can do no wrong, nailing trades with concise entries and the ability to scale out at our own prices. It’s nice. And during those times when it feels much more easy to fatten our accounts, it seems like such a foreign concept to lose. How could I ever have done that?
The Grass P&L is Greener on the Other Side
Other times, we find ourselves dead wrong with terrible timing. We’re dead wrong, and it feels like the moment a trade is entered, it begins moving against us. Frustration builds while confidence erodes, and you wonder if there’s something else you should try – anything to stop the bleeding. To top it off, knowing that we’re building the accounts of those guys on the other side of our trades is completely awful!
When we’re at our best, the traders we’re going against know the P&L is greener on the other side. Our side. It’s not about keeping “them” down, but rather ourselves up with consistency.
If there is one reality of trading, it is that we will indeed have losing trades. But how can we find ways to increase our odds of staying on the winning side more often?
5 Ways to Maintain an Edge
Put Yourself in Their Shoes. Considering the other side of your trades on a regular basis can give you a valuable taste of the emotions driving your competition to take action. Recognizing the greed or fear of traders by way of the price action will give you a valuable edge, whether by way of timing a new trade or adding to your confidence in an existing position.
Remember that Cash IS a Position. At times you’ll need to move to the sidelines, and others will wish they were with you. Feeling like you need to be in something all the time is a major but common mistake. When you see no great opportunities, sit on your hands.
Maintain High Standards. This goes hand in hand with the previous point, but those who overtrade are not keeping the bar set high. They’re lowering the barriers to entry, so to speak, by accepting mediocre setups, sloppy patterns, and generally trades with risk/reward profiles that aren’t in the upper echelon.
Zig and Zag. Many of us do have a directional bias with our trading, which may simply be a part of our nature. But trading isn’t about making ourselves comfortable – it’s about extracting profits. Sometimes that requires us to lean against or, dare I say, step a little outside those outer boundaries of our comfort zones. Consider the occasional short sale, because there are always weak stocks (even in a bull market). And even within a bear market, there will be strong stocks to focus on. Keep an eye on the outliers, there’s opportunity there.
Don’t Hesitate. When you see the writing on the wall that you’re poorly positioned (on the wrong side, or on the sidelines), act immediately. Hesitation opens the door for doubt, which results in costly delays. You either end up chasing a stock too far and end up with a poor entry, or you miss it entirely. So the moment you know you need to be out of a trade or into another, do it. Stay sharp, and show up focused. Speed is everything in this game, and absolutely includes your decision-making.
Trade Like a Bandit!
Jeff White
Are you following me on Twitter yet?
Nothing Wrong WIT This One
January 5, 2010 at 7:55 am
Solid technical setups often times will have more than one positive thing going for them. It may simply be having the market’s wind at its back, or it may be more like the stock I’m going to show you today. WIT has made a monster run since the March lows of 2009, tacking on about 350% since then. And while that’s a really impressive advance, the fact is that the stock is still trending higher – and may be poised for more.
Not only does this one have the long-term uptrend and higher lows/highs in place after that move, but even just over the past few weeks WIT has exhibited some great qualities. It popped big in mid-December on a surge in volume to make new highs, and since then it has put in some needed rest. We also see on the chart below a pair of white arrows highlighting short-term higher lows as the stock sits just shy of resistance.
On Monday, WIT turned higher on a pickup in volume, indicating we may soon see those highs get challenged at the $23 level. If so, this is one I’m definitely interested in, so it’s on my radar for a play.
Here’s a closer look for you:
Trade Like a Bandit!
Jeff White
Are you following me on Twitter yet?
LUV Still Adored
January 4, 2010 at 6:48 am
There’s a common desire among traders to “buy the dip” when given a chance, and I’m here today to show you one such opportunity. The idea of picking up stocks on even a minor discount within the context of a proven trend is indeed a good one – so let’s take a look at one chart of interest.
LUV, like many other airline stocks, has enjoyed quite a run over the past several weeks. The day to day action has been consistent, and although it hasn’t seen many huge individual days, the net result is an impressive 39% run over just the past 2 months. It may not be done either.
Even in the wake of the Christmas Day “underwear bomber” attempt (does that title ‘crack’ up anyone else the way it does me?), the stock saw only a very shallow decline before posting another gain to finish out the year.
The result of the dip has merely been some quiet consolidation on light volume, which has also created a small descending trend line just above current prices. A push north of that trend line at $11.60 could mean yet another takeoff for the stock (pardon the pun), so it’s on my radar for a play.
Here’s a closer look for you:
Trade Like a Bandit!
Jeff White
Are you following me on Twitter yet?
Video Review of the Indexes 1-3-2010
January 3, 2010 at 3:40 pm
Despite a very minor hiccup to end 2009, the bulls made a great showing when it was all said and done. The early action was extremely ugly, but the March-December rally made the ultimate difference and solid gains were posted across the board.
And the run may not be done yet. After all, uptrends are still intact for each of the major averages, and that certainly deserves our respect. But, it is indeed a new year, and there are no rules which the market must follow. That said, we as traders must be prepared for anything to come along, whether that means a continued melt-up, a steep correction, or anything in between.
As we head into a brand new week of trading, let’s examine some important levels in the indexes to keep an eye on in the days ahead. That will have the greatest influence on how individual stocks are going to move, so it’s where the trading week begins.
This clip was also posted over on the Trading Videos site (as always), and perhaps you’ve seen it there – but in case you didn’t, I wanted to put it here on the blog for you.
Let me highly suggest clicking the “HD” on the video player and then going full-screen for best quality.
Thanks for stopping by and I’ll see you here soon with more.
Until then… Trade Like a Bandit!
Jeff White
Are you following me on Twitter yet?
