FBP-a C&D Trade

Here's a link to past FBP posts


Recently I posted FBP looked like it was about to start another leg up-that was last week.

 The 30 min chart showing good accumulation as the basis for last weeks call-

 Right now on the 1 min we see some profit taking, I view this as an opportunity.

 Here's the breakout level to start a new leg up, it would be nice to see volume pick up.

And here's the T.C. stop. You may want to adjust that depending on your tolerance for risk.


While many stocks are manipulated in the averages especially (component stocks) it seems the HFTs and PD are not interested in these lower priced stocks. I never liked recommending stocks under $10, certainly not under $5, but the market structure right now has changed and there's a segment that can be traded successfully, it calls for good risk management and not swinging for the fences, but building your portfolio slow and steady, not spiking it with volatility in your position sizing.


So for now, we go where the opportunities are, and this seems to be a segment of the market that is ripe with opportunities. All in all, thus far I like FBP for another leg up.

FBP Follow Up

FBP is a trade from 2 p.m. on Friday, December 17th. It's been up about 8% today and as high as 21% since Friday when it was mentioned.

This chart has a huge base and I believe it could be an easy double.

 Here you can see more immediate accumulation on the 5 min chart from 12/14-12/17. 12/17 is in the white box.

 This looks like a huge stage 1 base. Being it's an inexpensive stock they take a little longer to accumulate without pushing prices higher, but it looks like they'll soon take FBP to stage 2 mark up where the real gains will be made.

 Right now it is showing a technical breakout, when it closes above the highs of the candle in the white box, volume should increase.

 Here's the daily 3C positive divergence/accumulation. You can see someone spent some time accumulating this position. I'd assume they expect it to go much higher. Look how big the leading divergence is (in the white box)

 Here's the hourly chart showing price is being confirmed.

Here's the entry from last Friday.

All in all, whether it breaks out today or another day, I believe this could easily be a double. It's already seen gains of nearly 22% since Friday.

More Trades

Today was a pretty good day for a few of our members taking the XOMA trade which has closed up +70% today with a 78% intraday high for a one day move.

One member in particular seems to hit a lot of the big mover trades. In our email exchanges, his success in hitting the big winning trade ideas is not his ability to sort through my list or having exceptional timing, his secret is simple... Risk Management. What do I mean by that? I mean he takes on a lot of the trades, some he loses money on, some he breaks even, and usually the big winners he catches. He has a variation on my risk management style which you can read about HERE, but it's largely the same. I'm not sure how big his portfolio is, but he enters a majority of the trades. He's good abut not entering correlated trade (i.e.: he doesn't enter 3 REIT trades, he chooses 1 REIT) and then he follows risk management. As I said he has his own variation, which is centered on the amount of risk per trade, he takes an approach that allows him to make most trades he enters the same size (I.e.-he doesn't trade $2000 on one trade and $10,000 on another, his trades are all roughly the same amount), but most importantly, he keep his losses small. In following a 1% or 2% rule, his losses stay very manageable on trades that don't work out, that allows him to live to fight another day and hit trades like XOMA today which ended the day up 70%.

Since this member is having such good success, I figured I'd share with you what he's doing so far as I understand it through our emails. He also s not shy about emailing me for updates on specific trades, nor should you be.

Since XOMA and biotechs generally seem to have rotated, keep an eye on the BCRX trade mentioned in these two posts from Monday 

Here are some other trades. I prefer to show them to you with charts rather then just list them in the trade sheet, however, give me some feedback. I feel the trade sheet doesn't show the premise of the trade as well, it saves me time, but what do you prefer?

Another trade that looks like its going to have some good success with a little patience is FBP.

The current stop on FBP is $.32 using the Trend Channel

A few other trades...

LLNW was a favored long, I posted on LLNW on Monday, October 18^th . In that analysis I thought the target would be $9-$10. Since then it's seen a 36% closing gain and an intaday gain of +46% nearly hitting the target, making it to $8.97. Since then and since it has done what was expected, it looks like there may be another trade brewing on the other side.

As you can see, the 50 day moving average has been treated as support and resistance. Recently it broke that support, which has now become resistance and it's failed a test or two of the average.

The 60 min 3C chart shows the parabolic spike which hit our target and the negative divergence there-it was time to take profits. Since, 3C has shown further distribution. I like this short here, but a bit of upside would make for an even better entry, say $6.75 or an intaday move above $7. Right now the Trend Channel stop is $6.80 on the tight end and $7 on a little looser stop, which is the one I'd prefer initially.

HOV Long

 HOV Daily 3C chart looks very positive and lends credibility to this being a base under accumulation for a move quite a bit higher.

 HOV base, I've seen a couple of other decent looking home builders for whatever reason. The two upper trendlines represent the resistance levels HOV needs to breakout of to enter Stage 2, "Mark Up".

The Trend Channel stop here is around $4.07, a little wider stop would be $3.90 and that would be the one I'd prefer on a new move to break out of a base where volatility can be strong.

The implied target=$6.10

CRIS Long

 CRIS daily 3C with a very positive leading divergence. You can also see the base, the breakout and support after the breakout at former resistance.

 When all  3 conditions are met, this screen gives a long signal, you can see them in the green boxes. This chart also gives you a closer look at the breakout through resistance and where the pullback found support at former resistance. The last green box to the right is an area on which this may pullback to. I'd prefer to start phasing into this position now though.

 This is the Trend Channel and the red arrow shows the current stop around $1.70, note that the Trend Channel has held the uptrend from $1.30 for approximately 3 months with so false stop signals.

Back in June, the big gap down on extreme volume looks a lot like the end of stage 4-"Capitulation, which allows CRIS to start the cycle again -Stage 1 base (complete), Stage 2 "Markup"-current position/stage.

VISN long with a stop of about $3.75

 VISN daily 3C chart with a current leading positive divergence.

VISN giving a long signal-MACD also is trading as it should and we have a breakout above recent resistance. I'm looking for a follow through move shortly. 

LNET long with a stop of $3.71

 LNET 3C daily with a strong leading positive divergence

LNET breaking out from resistance and a consolidation. Stocks consolidate two ways, through price correction and through time, this is an excellent example of correcting through time and it is the more bullish of the two in my opinion.

MACD looks exactly as it should as does volume. Very few charts that are advancing show this kind of technical strength.

ATEC Long

 ATEC looks like it saw the end of stage 4 "decline" with capitulation in the white box. Since it has built a small rounding base and is very close to resistance. A breakout above resistance will put this one into stage 2, Mark-up-this is where other traders will notice it and start bidding it up.

You can see that 3C daily chart went into a strong positive divergence/accumulation, at the same time the rounding base began. You may want to phase into this one or to wait for the breakout, which you lose a little profit, but gain higher probabilities.

As for today's market, the Price/ Volume relationship observed last night was just as bad today, being it's two days in a row (Price Up/Volume Down-the most bearish of the 4 P/V relationships), it is possible that the P/V relationship is signalling an overbought condition.

FBP

FBP is a trade that has already been featured. It is one of the few low priced trades I'm including on the January Trade list because I believe this trade could produce a sustained trend based on the size and depth of accumulation during the base.

Here's the charts...

 Here, if you can make out the red trendline, it shows a rounding bottom base which is over 4 months long. 3C on this daily chart, which is the most important timeframe, is showing a huge positive leading divergence. This is still a speculative trade and risk management should reflect that. It's also very close to a breakout, but even if it pulls back, I'd still like this trade unless it were to completely fall apart which I don't see happening. It's been added with a trade price of the current $.48

Here's my proprietary Trend channel i use for stops, the stop I'm placing on this trade (feel free to adjust yours as you see fit) is at $.42 on a CLOSING basis, not intraday. That's a fair amount of risk, so be sure to plan for it with good risk management and proper position sizing. If you need assistance, feel free to email me.

Cats and Dogs Trades Results This Week Thus Far

THIS WEEK UNDER THE CATS AND DOGS TRADES, WE'VE HAD 17 TRADES TRIGGER AS OF YESTERDAY'S CLOSE.

Of those 17 trades, 10 have offered gains , 6 have had losses and 1 is around break-even. Where you entered and exited is a function of your particular % P/L. A lot of you have contacted me for 3C intraday charts to gauge where the trade was and some of you have had excellent exits. I'm not aware of anyone who has given up a gain for a loss. As far as losses, we've talked about risk manageent on these trades so whatever the actuaul trade loss, no losses should have represented more then 2% of portfolio and as I have stated for trades like these, I prefer to keep the 5 risk of portfolio between 1-1.5%, it makes taking the trades worthwhile and with a majority having offered gains, it's a good strategy to keep losses minimal while being able to hit some big winners.

We started off the Cats and Dogs trades last week with a 4-day 215% gain in XOMA.

This week thus far ( gains /losses were compiled this morning ) looked like this:

CRIS    +8% intraday as high as 12.5%

DSCM  +3%

OPXT  +14% as high as 16.7%

URZ     Up to +15% 1 day gain

WEST Up to +10% gain

CFW    +24% 1 day gain, as high as 26%

XING   As high as +85%

EEE     +27% 1 day gain, up to +35% intraday gain until present

ATEC  +8% 1-day gain

FBP which was an earlier trade- the only person I know of I believe exited yesterday as there was a loss of momentum. FBP offered gains of +60%

STEM was at last check trading about break-even

As for signal trades at a loss we had 5 under a 2% loss and one at a 6% loss.

The trades that triggered today have not been figured in as of yet.

Look to the Other Lists

Almost every-time I post I say look at the older lists, the are only a week old and if something looks good and hasn't moved, take a look at it. Here's what I mean:

From the Jan 7 Trades: MRNA up 51% today alone as high as 96% and MA still looks like a decent short.

From Jan 8th Trades: CTIC jan 8 up 17% and LJPC today 15%/35% to date
NLST still looks like a good long
so does ASTM and OSK looks like a good short.

From Jan 11th Trades: FBP hadn't moved so was still active and traded up over 8% today
MOVE is up 15% since the 11th and added 6+% today and AREX is up almost 8% today.

DSTI looks good long as does OXGN, STSA, and WAL which is offering excellent risk/reward ratio right now.

From Jan 12th's  Trade list: GOOG has moved, but still looks good for a short, MOT short, we added today to our position there and GU looks good on the long side with excellent risk/reward properties. So I write it all the time, look at past trades. If you are not sure about something you like, email me. I just can't keep on top of every idea I post-Goldman Sachs admitted they can't even do it so my one man band certainly can't, but I can answer your emails.

Good luck and see the post below.

Patience Pays Off-Trades for Jan 21

BOFL flew today, that's why I'm still including ENG and SSN if you haven't taken a position there yet. MOT has been on the list, but it is still within shorting range. All the ETF's I mentioned are worth a foot in the door to get a position started.

The dollar broke out of a bull flag today-Bad news for the market. Be careful with oil/Gold right now.

I thought this would be a "V" shape reversal, but all of the sudden I'm seeing tops everywhere.

I listed a few tonight that have the potential for big gains-the high fliers, but there's a lot of nice shorts there too and if you don't have some short exposure, I'd be careful with the longs.

I'll update the targets in the tomorrow-all trades are at the open/at market and as always, feel free to email me about any of the ideas. A few I really like-FBP and BBX plus what I listed above.

Pinning the Calls

As I mentioned in the last post, today is options expiration day and it's typical for higher open interest contracts (calls) to be pinned. The highest open interest SPY calls are at $125 - 131,815 contracts. I'd expect those calls to be pinned and expire worthless.

From last night's trade ideas, RURL which is a trade on or toward the close has met the first condition of a reversal I was looking for by opening higher, gapping up. Now it needs to just close below $14.20, the further down the better.

SNY is acting well for the short trade, continuing to break that flag I showed you last night.

AZN already lost nearly 6% , it's a bit tough to enter, but if it closes below (46.60-support) it may see follow through downside so I still like this trade, only wish it was a day earlier.

The FBP long is holding its own this morning considering the broader market.

JSDA is also holding its own thus far, up in a down market.

TRADES

Today's dominant Price/Volume relationship was the most bearish, close up/ volume down.

Earlier today TICK volume hit -1500 which doesn't happen too often, yet we saw a marginally higher close. 

As of now, and as I showed you earlier today, the Euro is moving up, FXE had positive divergences which makes sense with the continued move up in the euro after the market close. Should it continue higher, we should see a gap up in the a.m. and some early strength, what happens next will be hard to say, but the Price/Volume reading wasn't one to get excited about as a bull. 

Below are some trades to take a look at.

RURL Short- watch for a gap up in the morning and a close down, at tht point it is worth a shot on the short side with a stop @ $14.95

The last 3 days have seen diminished momentum on high volume, or churning/distribution with today forming a shooting star reversal candle.

The chart above shows the same thing, distribution over the last 3 days. This is more of a swing trade, but possibly a parabolic move for quick, decent size gains.

MGLN- Short sale on a move below $46.29 with a stop at $47.15

The bear flag is seeing distribution and should break soon.

SNY-short

The 200 day moving average has been very important support/resistance

The 60 min chart has shown distribution at the breaking points of the 200 day.

The 1 min chart seems like SNY is ready to rollover, exhausted by the fights at the 200 day m.a.

AZN-short

AZN has seen resistance and support off the 50 day, now it will act as resistance .

3C seems to confirm the distribution heading into resistance.

FBP is a speculative long play

As you can see, it's giving a long signal.

3C shows accumulation in a long formed base.

The 5 min chart shows what looks to be a stock ready to go into stage 2 markup with continued gains, there's a good chance this one could move up quite a bit and for awhile considering the size of the base.

JSDA is a speculative long

As you can see, JSDA has held the 200 m.a. for 4 months which makes for a fairly low risk entry.

The 10 min chart looks like it's bracing for a move up.

The 1 min chart looks like the market makers are stocking up for a move as well.

The Cats and Dogs

It all started last week with our 4-day 215% gain in XOMA. As I've been saying though, this rally won't last long and when the trades trigger, you need to be on top of them pretty quick using good risk management. I prefer not to risk more then 1-1.5% of portfolio value (as per risk management formula-which does not mean you can only buy 1% worth, in some cases, you could invest your entire portfolio following the risk management plan-however, that would not be prudent and if you read the link at the top right about risk management, you'll see that I prefer to never invest more then 15% or so of my portfolio in any one idea). 


In any case, obviously the CATS and DOGS are working, when you don't risk more then 1-1.5%, you can afford to try the trades and the way it's been going, you're pretty likely to nail a few of them.


The other component is knowing when to take a gift. With the Cats and Dogs trades, these should be considered gifts, not so much trades because as I've said, they rarely last more then a few days. So my rule is any double digit gain, I take either most or all of it off the table, consider it a gift and wait for the next one.


The winning trades that triggered just today and yesterday have shaped up like this-

XING doing great today up nearly 32% triggered yesterday

CFW made a 1 day gain of 30% triggered yesterday, but you see in this trade, it's a gift and needs to be taken or your gift will be taken from you. There's little room for greed when you get a gift.

WEST seems to be doing pretty well, I'd like to see a strong close on volume for potential follow through

EEE is up 19% and as high as 30% today-a gift

FBP was a trade from last week at $.33 it's currently up 42%, intraday as high as 60% . I think I'd be locking this one in or at least a major portion of it.

FTK triggered today, again we're looking for a solid close on good volume, if that happens, we might just get that follow through buying.

I've placed a few more trades on the list today and I'll be looking for more tonight, but this C&D rally seems to be winding down. If you decide to let a trade ride, be sure that you have locked in enough gains so that it does not become a losing trade for you.

Other Triggered Trades

STEM which triggered yesterday looks decent this morning. Also FBP from Wednesday is now up over 25%. There's still quite a few trades that haven't triggered so make sure you set those alerts.

If you don't have a way to do that, you can use www.FreeStockCharts.com which is the only free realtime service I'm aware of, there's no 20 minute exchange imposed delay and you can set alerts there.

Checkout FBP-it looks like it's starting a leg up.