Friday, May 16, 2014


Closed GNRC for a 5+ point move on the short side.  Average $ 57.29

Reasons for entering the trade:
The company makes generators and had what I felt would be inflated earnings due to adverse weather.  As the weather normalized, I expected earnings would normalize.   Sure enough 1st quarter they missed on revenue.

Trade Assessment:
This was not an easy one.  I used a stage entry,  but probably entered too early 56is. on the first of the position.   I allowed 2 R risk and when it dropped back under 60 I added @ 59 range.  My risk limit was nearly hit in March but fortunately it sold off.

Exit:  Why did I close the trade?  Knowing when to get out on a profitable trade is the thing I find most difficult.  For a trade like my BAC trade, I had a long trend that could use a trend line as a stop. That's not present on a trade like this yet.  So after the first drop, I forced my self to stay in as it rallied back up to 55.  What I did not like, was seeing it reverse yesterday after hitting the 200MA.  It was acting much stronger than the broader market, so do I take the profits or the chance that the momentum fades and moving average support fails to hold?  

Ultimately, I elected to take the profits.  I considered phasing out partially but I elected to put the money into other  opportunities.  If it continues to rally,  54 range, it might be worth trying to reinitiated a 1/3 position.

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