Wednesday, March 17, 2010

Now long CHOP!!!

Well this morning I got lucky with CIT. I had no idea that they would have been making an earnings announcement yesterday. Otherwise I would have definitely been out before today. However, I got lucky this morning as the stock gapped up nicely on the news and I sold into the strenght.

And although I still love Visa for a position trade hold, I sold my sole call option in it to free up my capital. The reason for this is that I believe that CHOP offers a far superior risk/reward at this point in addition to a much higher probability of moving sharply higher in the short to intermediate term.

Therefore, this morning I bought 660 shares of CHOP @ $6.488 with a stop below support at $6.25. So far its not doing too badly. However, I am a little worried about the markets. Although the markets still remain in a firm uptrend and the T2108 still managed to move into new highs for this rally yesterday showing that market breath has not yet begun to diverge, a few leading stocks like CAGC have cracked open. This has me a bit fearful. However, I cannot let fear rule my trading but instead a solid set of rules based on my own observations and well documented market precedents like PEAD for instance.

Else I will end up trading like "chartswingtrader.com" who always seems to be doubting the trend when ever the markets are rising instead of going long the leading stocks when they offer entries and staying long for profits!

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