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.

New Positions -- Short P, KNDI

Based on my belief that the market is in the midst of short term relief rally, my plan was to initiate some short positions as the market bounces.  I took two additional positions.

Pandora $P, Short 28.87  --- Heavy down that appears to sill have some momentum, a bounce on support at 26 followed by two bullish days rallied to the 9 ema which has tracked the down move pretty well.  Initial Target 26.  Stop at 31,  risking about 1%

KNDI  Short 14.04-- Showed very poor relative strength .04 and the MACD is picking up downside momentum.  Stop 15.90 --high from three days ago.  Risk 1.25% 

April 9, 2014, Bounce continues

Two days ago I suggested that  a reversal of selling was likely .  I bought some FB and GTAT for quick trades.  The bounce has continued.  Through today and picked up some momentum after Fed Minutes.  Nasdaq was + 70.91

I'm not convinced that this bounce is anything more than a relief rally.  Breadth indicators like the hi/low  are not showing board participation.  I am using the bounce to initiate some short positions.

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.

LULU closed

I bought this bought this because it had a nice divergence on the MACD, when it failed to go lower-- higher lows and it got a good move after earnings.  I was targeting a close of the gap to 57.25  But the overall markets started to sell pretty hard and although LULU held well for two days into the sell, on the third day it gave back over $2.50.  I had  hoped that it would  catch a bid given its relative strength and doubled my position with a tight stop. In hindsight,  I should have waited for the broad market to wage a come back or I could have held my first position longer and looked to take partial profits at the 55 mark.

But no real regrets for this trade given the choppiness of the market. Closed the position out for $163.  Nothing to brag about but it could have turned into a loss.

Playing Defense

The market has pulled off a couple of big down days in a row. Until recently, my positions have weathered the storm pretty well.   I'm still sitting on big profits. My stops should prevent a shark bite -- a single loss greater than 2% of portfolio.  As I see it, my biggest risk is having the market take out a number of my stops in short period.

The nasdaq shows 3 big day down days. But it was encouraging that it rallied about 29 points after hitting the lows on the day.  I caught a bit of the move day trading FB for +.60 move.  I don't like to day trade but when the move stalled I figured it was better to get out than to wait to see if the move continued tomorrow as FB was beat up pretty badly over the last week.

Given the choppiness, I've reduced my HCLP position by 1/3 and my RFMD  position by 1/2.   I completely closed LULU after my attempt to buy down was taken out.  There was a reversal towards the end of the day and the position would have worked out better.  But in choppy markets it is more prudent to take profits faster.

XCO

Bought
XCO @5.87, on on the break above a 5 month base.  Followed by two days of spinning type dojis, That breached the 6 level.  Not unusual given the overhead.  The MACD still looks pretty good.    

Initial Target 6.75 level. Against stop of 5.45.  For 2 to 1 initial Ratio for a .5% risk.  I feel the market is too choppy to go bigger at this point.  Look to move the stop up if hits   6.20 the stop will be moved up.