Trading Strategies Pt1
Daily Stock Report for Thursday Morning, December 24
, 2009 pt2
Summary Opinion The next couple of weeks are vulnerable to a lot of cross currents with fund managers re-arranging their holdings. Consider reducing long holdings for lower risk and look for substantial exposure to long positions in January. This is not a great time to be heavily long but favors short term positions in swing positions. Consider reducing long positions this next week as stocks climb to reduce risk.
Calendar Tuesday, 830am ET, Gross Domestic Product, 2.8%Tuesday, 1000am ET, Existing Home Sales, 6.25MWednesday, 830am, Personal Income, Spending, Consumption, Mortgage applications, Wednesday, 1000am, ET, New Home Sales, 430kWednesday, 955am ET, Crude Oil Inventories Thursday, 830am ET, Initial Jobless Claims, 470KThursday, 830am ET, Continuing Claims, 5.175KThursday, 830am ET, Durable Goods Orders, 0.5%Friday, Christmas Day, Markets closed.
Follow-up: HPJ, see notes below. PEP, Pepsi. Pepsi bounced today sharply from Fridays low, and looks likely to move up for another day or two. This is the downside of using stops but by keeping discipline to use trailing stop losses, it will keep you from having really large losses on any individual stock idea. AAN, Aarons idea cancelled and you should have stopped above $29, which occurred today.
Focus chart:
HPJ, Hong Kong Highpower bullshort is acting better and faster than expected with a 12.7% drop today on this short position. From all points of view it is doing very well. The stock opened down, attempted a slight rebound and went to a lower low and closed toward todays low (Tuesday). This should have 2-3 more down days from here but not as sharply as today. A target price of $6 seems likely on this run down we are having now. Usually the best way to play these bullshorts is to close half of your position near that target price and keep open the rest to see how it acts with the idea of going lower. This is a particularly good strategy to reduce your position if you didnt listen to your coach and built a big short position or are leveraged in this short. The key point to watch for at this point of the bullshort cycle is if it wants to bounce off of $6 or low $6s but my best guess is this will probably break below $6. As Ive said several times, dont get hung up about the target price as if this is gospel. These are estimates and you need to be flexible about capturing some or all of your profits based on how they act.
Mitch King
www.TradeStocksAmerica.com
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Mitch King is the founder of TradeStocksAmerica.com. All material presented herein is believed to be reliable but we cannot attest to its accuracy. All material represents the opinions of Mitch King. Investment recommendations may change without notice and readers are urged to check with their investment counselors before making any investment decisions. Opinions expressed in these reports may change without prior notice. Mitch King and/or the staff at TradeStocksAmerica.com may or may not have investments in any stocks cited above before or after this newsletter is prepared. Use the stock table above as a model portfolio of ideas that look attractive at the time of the writing. Comments can be hypothetical in nature. Opinions expressed in these reports may change without prior notice. Disclaimer - Stock investing or stock trading has large potential rewards, but also large potential risk. There is risk of loss as well as the opportunity for gain when buying or selling stocks, bonds, option contracts or engaging in any strategy listed in the Daily Stock Report, The Wizard Training Course, The Trading Room and our seminar or workshops. You must be aware of the risks and be willing to accept the risks when investing or trading in any financial markets. Don't trade with money you can't afford to lose. This website is neither a solicitation nor an offer to Buy/Sell stocks. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this website. The past performance of any trading system or methodology is not necessarily indicative of future results.
by: Mitch King
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