Closed: HIMX

So HIMX pulled the pop and drop on day 2 of the breakout.  I sold 30% of my position on the pop at 8.50  and I sold out the remainder as it faded at 8.16

My breakout anticipation entry worked very well as it popped from consolidation as soon as the 10MA hit the pice.  At the time, I commented that I thought the breakout would have been stronger had it not started from an overbought stochastic and RSI reading.  I was somewhat surprised by the strength of the initial move given this dynamic. Ultimately, the overbought stochastic caught up with HIMX and the stock fell.  I was fortunate enough to sell a portion on the pop. 

Pull backs to the 10 can be bought with the sweet spot between the 10-13.   

Entry: 7.76

Exit 1: 8.50

Exit 2: 8.16  .9 R

  

LIME: Better for my Coronas than for my portfolio

LIME took off big on news that it obtained 180 Million contract.  I bought pre-market on the news.  $5.80 and sold premarket $6.15 .  This was a reactionary trade and although I made money, I'm not pleased with my decision making process. Based on my research, I do not believe that this is  a Big Gain stock that some may think it is.

But let me run through the process:

• Step 1: Big move after neglected period with high volume?   

Yep!

Weekly:

Daily 

Many traders will chase these types of moves.  But I'm still not yet convinced that Day 1 is the must buy date. As often gaps are tested or quiet period will ensue 2-3 weeks later on a weekly chart.  That can be the best low risk entry point.  In my opinion, trying to buy immediately is asking to be chopped.

Observation: If Lime is indeed a Big Gain stock, then there is still time to buy as a better opportunity to enter will present itself.

Since Lime easily passes the big move test on to step 2.

Step 2.  Does it have "game changing news?"

"Lime Announced it has been awarded approximately $180 million of new utility program business." 

Lime has 3 Million shares outstanding and even after this burst it only has 18. Million market cap?  Sales 10X market cap, Amazing. That could be a recipe for an explosive move. Right? At first glance, I might be tempted to answer this in the affirmative. ( In fact, I did which is why I took a position. )  After more research, I don't think so.

Here's why.

First, and foremost, I question the legitimacy of the 180 award.  According to the PR it will be earned over 5 years.  Still a huge number but obviously more realistic. But here is the language that I view as the caution flag:

"The recognition of the potential revenue of these awards would occur over five years and depend on the receipt of certain regulatory approvals and Lime’s ability to sell sufficient program services."

So how much revenue do the legitimately expect to earn? Is this simply 180 million program that LIME has  been accepted into as well as other companies?  I do not know the answers to these questions.  

By Comparison, when CDXS announced a big deal with GSK, they called a Conference Call so that such questions could be asked. (Thus, I know CDXS expects to realize 11 Million this year)

Given that this award would be so much greater than any other revenue quarter I'm leery of taking it at face value.

• Caution Flag Number 2: Shady history
• Numerous Reverse splits 
• numerous warrant agreements w/ insiders
• Warrant deals often cause dilution allowing insiders.
• Prior restatement of earnings
• Class Action lawsuit  (LIME paid over 2.5 Million to settle one suit, it appears another is still pending. They expect that D/O insurance will pick up tab.
• SEC investigation

The company did fire its prior CEO so maybe it's gotten clean.  In my opinion, it still sounds too much like a pump and dump.  I'll keep it on my radar as q2 earnings and conference call may answer some questions

Lime reports q2 earnings on August 14.  One thing I'm certain of is that we will now see some analysts now attend this call.  q1 there were none. 

The key question is how likely is LIME to obtain additional revenue? How much? and when?

Closed EMES

I bought the beginning of the pull back.  A day early perhaps but I rode out the reversal and Sold out today for a healthy gain.

Entry: 108.46

Exit: 114.67  (+6.21) I also picked up a 1.17 dividend  for a total on the trade of +7.38   6.8% Total 1.3R

I was saved on this trade by the strength of overall of the industry.  Instead of trying to by "cheap" I should have waited until the reversal was confirmed.  Had I bought the day after the reversal candle, I would have gotten a much safer entry if not a better price.

I took profits today because it rallied in the morning off HCLP's earnings which were very strong. HCLP then started to get sluggish and sold off.  Rather than wait around and see what happens,  I decided to get out as EMES has earnings tomorrow and I think it is likely that it could sell off despite fantastic earnings.  

Closed: HCLP. Many bad decisions One Big Gain.

MY HLCP trade comes to an end as my stop is hit.  This was a big gain so here's the re-cap.

Entry 1:  $39.9  (Feb 18)

Entry 2:  $38.32 (Feb 21)

Entry 3: $37.55 (Feb. 21)

The breakout on the initial entry failed.  Quite frankly, it failed in epic fashion.  I bought small because it was at a high end of the range.  As it pulled back, I added.   It then rallied--and failed again. 

Exit 1: Sold off 40.65 (April 7).  At this point, HCLP had rallied to about a high of 42.50.  And then sold off.  The sell offs were relatively quick.  I'm not sure why I made the decision to cut back on the position here, but I did and I sold off 1/3 of the position. I'm sure this was more of a "fear" of losing profits decision than a profit target.  That being said It worked out and  I bought back that position 3 days  later at $39.43.  

Entry 4: $39.43.  

After selling 20pts higher its easy to just simply think you made a great decision at the time.  But the truth is I didn't.  HCLP started to sell off... I bought... it went down more on huge volume.  The announcement was that they had announced a secondary offering. There is nothing that looks good on this chart. Perhaps if I were playing a mean reversion strategy some triggers would go off on huge. But I can't say I was.   At this point, all of my position was underwater.

Things Change.

Up to this point, HCLP had been a disappointing trade. Over the next two days. A couple of reversal candles formed:

This would have been a good time to buy.  Two reversal @ 36 would strongly suggest the end of the downward pressure.  A stock could be placed for the break of 36, which would presented reasonable R/R.

Then the fun begins.

I was on vacation that week in June when it sold off but was pleased after it compressed and headed higher by week's end.  I didn't not have a particularly well formed exit strategy. So I decided to ride it out. 

EXIT 2, position closed.

HCLP then topped out and sold off hard.  Sure I knew HCLP was over extended but I was hopeful it would compress and the selling continued.  I had set a volatility stop  3.5 X 21 ATR, which had tracked the trend very well.. That stop was violated and I sold at $58.92 today.

Summary: Avg. Entry 38.88 $    Exit. 58.92   (+ 20.04 51.5%)  Dividends (1.10)  Exit 1 (+1.02  (3.07/3)  Total points. 21.58  ($57.80 % Return).*

*Correction.  HCLP went Ex. Div. yesterday. So I'll picked up another .58 in dividends, which will be paid later this month.  I added this anticipated dividend payment into the total return.

In speculation, emotions are always in the backdrop.  There's fear, there's greed, pride, embarrassment, loss and regret. 

Here, I acknowledge I regret selling at this point.  I wanted the LT capital gain.  I'm fearful that HCLP will bounce and rally to new highs.  The fundamentals are strong. The industry is going to rally expand or it could implode.  Much could be priced in, new quarries could go on line prices could collapse. I don't know. No matter how informed I may be, I can only trade price.

My ultimate success as a trader will depend on being able to get beyond those emotions or realize how they impact my decision making process. 

 After I sold, this today. I felt the need to engage in some reckless day trades in MBLY-- some new IPO that I'm not sure what it even does.  I made money on the trades, but what the hell was I thinking?  I think it was regret.  I probably had married my HCLP  position more than I would like to admit.  And when I got out my subconscious must have felt the void.  I have much work still to do.

Closed EJ, LNG

I got a couple of nice moves.

Three good days in a row.  Decided not to tempt fate. Sold

Summary:  I got a good move there is probably another day left in this move.  Had I taken twice the position, I would have only sold half. But my position size was a product of the number and size of other positions I had on when the position was taken.

Entry: $9.79
Exit: $10.94  + 1.15  11.7% 1.05R


LNG:
After a false start after buying LNG regrouped and re-broke out and hit an all time high. Less volume today.  So I decided to close the position selling into this strength.

Summary:
Entry was not great  I bought four days after the range breakout.  On a weaker industry group that probably would have crushed me.  LNG has been strong all year (and then some) which gave me another chance to re-enter.  In the future, I'd be better to buy closer to the 20MA

Enter: $72.46
Exit:  $75.92   + 3.46  4.77% 1.2R

Market Sell off Closed AZO calls, RFMD + 25%

After a bounce yesterday, the markets opened down big on news of a Portugal bond situation and talk of the end of QE.  Pre-market every thing was very, very  red.

Preservation of capital time. 

I knew this meant AZO would pull back and would not breakout today.  As my call position depended on a breakout today or at least movement toward that direction, I knew I needed out. So I got out at the open.  I used to the increase in Vol. to get a better price and got out at .60 for a very small loss.

Likewise, I decided to get out of RFMD.  There was a bid Pre-market that I felt would be at least .10 higher than it would open so I hit it and got out at 9.47.

RFMD is a position I've had for several months and the chart shows why:

I bought at $7.47 on March 5.  and sold @ 9.47.  So I end up with a 25.8% gain on the trade.  Obviously, there was a very nice trend.  I got a little hesitant as there was a lower high.  From a fundamental side, RFMD will soon be merging with TQNT the new company will cut a lot of overlap and it will be an interesting one to watch.  That being said,  I would anticipate that there may be some "final period" issues that will be reflected in quarterly earnings and growing pains as the companies merge. I don't see this position as one that I would be able to hold to next march without a substantial risk of a pull back.  For that reason I'm outta here. 

LEJU closed

I closed the remainder of my Leju position out today when it broke 12.  Today presented a big red bar. Under the right circumstances, I could  have tried to ride out the move since I had already reduced my position by 1/2 and hope for a reversal. I elected not to do so because  SFUN (which I sold yesterday), a competitor of LEJU absolutely got hammered today--over 7%. If other stocks in an industry get hammer it is best not to see if your stock is the sole survivor.   Leju held up for most of the day, but 12 ultimately caved as well. 12 was my mental stop.  After I sold LEJU quickly dropped to as low as 11.51. 

 Summary: in at 10.65 (5/13).  Out 1/2 at $11.91 (5/28) Out  1/2 $11.90 (5/30) for an 11.83% gain.

 No regrets about this trade. My analysis when I entered is here.   Although earnings were great it is a thinly traded stock that I don't want to wait for it to make its move.  This stock is more than capable of very quick sell-offs as it is of big gains.  Note the severe sell off earlier this month.  If it is not actively being pushed up it could fade just as fast. So did I gamble a bit on earnings? Absolutely, but I was rewarded with that big green bar and a nice profit on the trade.  

SFUN Closed out, BHI opened

So got the big red bar today in SFUN and decided not to wait to find out what it means out at 12.58 near LOD, love those.  But hit the entry very well on the move at 11.23 (1.35 or  12% for a week hold).

Reasons for Selling: Relatively large move down. The stock overall is still in a downtrend so the chances of it reversing and continuing that trend are better than average.  

Time will tell if selling was the right decision here.  This could be the beginning of a extended uptrend or it could resume what it had been doing.  But as I refine my profit taking criteria I do know that I would rather close out for nice profit than a loss.

BHI: New buy

I've liked the look of a lot of oil related companies and BHI is one such company.  It has had over a month of consolidation in a very tight range.  Today, saw a bit of a bigger move and some additional volume.  This type of action often precedes a bigger move to the upside. I'm not a fan of chasing stocks or buying breakouts as I would rather be in before the action heats up.


  Stop at 68 or just over 1R.

CLOSED: GNRC

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.

NBG closed

NBG got hammered on news that it was having a secondary.  My long play was the Jan. 16  calls with a 10 strike against the Jan  16, 5.5c short calls.  In other words, sell the 5.5 to pay for 3 10 calls (plus a credit).  The dilution makes it less likely that a move to 10 is likely.

Although my original theory was wrong and had I taken a stock trade I would have been run over, I made some money on the spread.  This a reason why I like ratio spread -- you can be very wrong and make money.  If you are very right you make a lot of money... as long as your not just kind of right.

Closed BAC

I bought BAC on 2/8/13 @ 11.85, The financial sector had shown strength after being decimated.  I bought within a consolidation period.

 I used the 30 Weekly Moving average as my stop.  After an initial move being able to monitor to switch my monitoring of BAC from a daily perspective to a weekly perspective enabled me to catch a very nice move. It would have been nice to stay in this position longer as it had picked up some pace to the upside over the past month (reaching a high of 18), but rules are rules and we have a red impulse bar that breached the 30 MA.

The position was closed on 4/11/14 at 15.72  +3.87 (.04 dividends)  32.65% gain (long term capital gain).

CLOSED: MOS

MOS is one of those trades that show nice potential at points but never quite get it done.  I was looking for a reversal play and it seemed to have all the elements that I look for -- a vicious down move followed by a long side ways period.

Entered 1/10/14 @ $46.64 -- Nothing special about the entry after recovering from Dec's dip MOS recovered and traded sideways.

Exit 4/11/14 @ 47.73 (+.25 dividend) With the dividend a 2.87% return.

Recap: I looked for a longer term play but there were a multiple opportunities to make a bigger profit. I had a big move within 3 days after buying.   I had a small position and a wide stop so  I could play a big move. In retrospect the doji should have been a sign to take profits on 1/2 the position.   I would not be surprised to see Mos  head to $44 based on the state of the market.  At that time it may be worth getting in again if there is a long legged reversal like was seen in January.

My decision to take profits was based less on what was happening in MOS than in the market overall.  I wanted to reduce exposure to the market and take a profit before it went red.

Market Sell off continues. Profit taking.

As I expected, the relief rally failed.

Both of my recent shorts, P and KNDI hit my profit targets and I closed both positions. On KNDI my Target was 12.  Half the position was covered at 11.88.  The second half  remainder was covered at 12.70 after the 9EMA was touched-- it was my stop following the move down and it tracked very well. But if I used a 10 EMA I would still be in.   This one is probably headed lower

P, Took out a very nice profit in one day.  There was more down side left but ... I suppose I was too quick on the trigger.  But after +2.22 move the profit was too good to pass up.  No regrets.

GTAT

This is a stock that I know and have done well with on the past. GTAT has had a very nice run but is now in a consolidation phase.

I bought yesterday @ 16.54 and sold pre-market at 16.91. I realized that I didn't really have a plan for the trade as I was perhaps caught up in the impulse of seeing the market going up and wanted to grab part of it. GTAT had been a momentum play but as the chart shows is going sideways and the MACD is negative. Since I've noticed that GTAT gaps up, often to its daily highs, I decided to get out of the trade. In total, I made a profit of $148.  

In some aspects this was a bad trade as was reactionary and I didn't really have a profit target as it was not planned. I did have a stop under yesterday's lows.  But I also think it shows I've gotten better as a trader by recognizing my mistake and getting out, with a small profit no less. Years ago I would have probably let it ride to see what would happen.

DFS It doesn't pay to discover.

Markets rallied on a China Interest rate cut.  Stopped out on DFS for .90 loss.  I think the stop was probably too tight.


My profit stop in FB got hit so I took a .20 profit.  ( sort of a stupid and pointless trade)

NKE: Closed +$1.48

I was stopped out of NKE at 107 today.   It went for a 1.48 gain, which is ok but I gave back 3 points of profit.  

I have mixed feelings on this one,  Getting out with some profit is the right decision and the market is attempting to rally.  I still feel this has a much bigger move down so I probably was right in attempting to give this some room.

Between this and WHR (both "winners"), I left a lot of money on the table.  My sell strategy needs work.

WHR: swing trade

I traded a decent swing on WHR over the last day.  I bought at 56.78 off the bounce with a stop on the day's low.  I got a nice move today and move my stop up to 57.90, which got hit on an intraday pull back.  It's a shame because had I not been so aggressive on moving my stop up I could have captured  some more upside.    In all I made about  $1.10 on the trade on 200 shares.

INVN: Swimming with gators.

This was stupid.  I bet on a reversal of a strong down move.  I survived buying 500 at 17.80 which I traded out of for $140 gain.   The risk to reward wasn't great on this trade.  I pushed out of the entire position because I didn't want to hold it into the weekend.  

Triage:  I think I was pissed at myself for letting this turn from a profit to a loss earlier this week and I wanted my money back.   This was an impulse trade (The elder impulse system would expressly would forbid it), and I should not have taken the trade.  That being said, I made money but I cannot count this as a good trade because I broke my entry rules.  I was in for 1% R which very nearly got hit. Again,too much for this type of "falling knife" trade.

 

CORN: Shucks

And I closed most of my short. and then limit up today: Stopped out on the last portion for .58 gain.

I re entered the position short on 200 shares at 38.84 with a stop at the day's high.  I'm less confident in this move now after such a strong move reversal.  I'll look to take profits quick.

CORN: Taking some Profits

With INVN and WFM fresh in my mind, I figured I needed to take some profits before another winning trade turns into a loss.  This has been crushed. I bought  300 of my 400 shares back in at  37.97 for a $678 profit.  Still holding another $264.50 of gains.  I'm moving the stop on that to $38.84, to preserve gains.

On a weekly it could fall a lot farther if it doesn't find some support soon: