Wednesday, March 3, 2010

These small cap chinese stocks are frustrating me!

Firstly, I must admit that I was a bit impatient about getting into SPU. The beautiful channel it was forming on the 5-min chart was irresistible. So I bought in @ $6.19 just before it broke out. It has since spiked beautifully as I anticipated. This is what the chart looks like now:

Hopefully it follows through and breaks through $6.60.

Now this is the frustrating part. Yesterday YUII broke out beautifully closing up over 10% on massive volume (chart on the left). Today, however, it closed down just over 5% on heavy volume (chart on the right).


Talk about volatility! How does one hold on to stocks like these? Hmmmmm....with a solid trading plan! Without it I would have been all over the place. Although a pullback looks very likely here, I am still hopeful that YUII comes back tomorrow with a vengeance or at the very least does not stop me out before blasting higher.

My third position, ASPS, still looks good here so I am confident in holding on to it. It is forming a beautiful channel buy-able on a breakout (i.e. for breakout traders). Here is the chart:

All in all I am fairly relaxed about my positions but I have my fingers crossed that the markets do not suddenly fall apart and I get drawn down in the process. I am contemplating narrowing my targets to 2:1 in light of the volatility I am seeing and taking smaller and much quicker losses. As I continue to monitor the markets and the leading stocks I will make a decision.

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