Thursday, March 10, 2011

Update and Watch list for tomorrow...

UPDATE


None of the secondary plays from last night's watch list triggered an entry. The only stock that gave a trade-able set up was $CPWM which I tweeted as a buy on the break of $11.00 with a stop loss @ $10.80. Although it would not have triggered the stop it did not really follow through. Never the less, its close near the HOD is very encouraging in light of the fact that the indexes closed at their LOD after selling off on heavy volume today.

In the morning, I tweeted that I was looking at four new break out stocks: $SPPI, $ANIK, $FCEL and $FTEK. $FTEK and $FCEL never followed through and sold off with the over all markets so no trades were there. The price action in $ANIK was encouraging for most of the day until an hour and a half before the close when it sold off on heavy volume and never recovered so again no play there. $SPPI on the other hand, held up very well right through the day in the face of the weak markets and rallied powerfully into the close and closed right near its HOD and so this was easily the only/best over night trade.

I might have actually traded $SPPI had my greed not gotten the better of me. When I saw the low float oil stocks bouncing I thought that playing them would lead to bigger gains than $SPPI/$ANIK and so I entered $LEI long @ $3.50. This trade started out well as I highlighted in my previous post but closed flat. I am hoping that I can get away from this trade with little damage in light of the weakness in the overall markets as well as oil.

WATCH LIST


With the SPY's right at support we can either bounce tomorrow or slice through and sell off hard. Either way I do not think that holding long positions even for day trades will be easy. Since I cannot short stocks and I do not think holding longs will be easy I will most likely not be trading tomorrow. However, having both long and short watches cannot hurt. On a separate note, my not being able to short stocks has caused me to be some what long biased. So that although I saw excellent short set ups like $LEI, $BDCO and $GPR this week I did not highlight them. I will make a concerted effort to list both long and short watches consistently although I cannot yet short stocks. Here are my watches for tomorrow:








My major focus tomorrow will be getting out of $LEI firstly and then trying to identify new break outs. I would feel more comfortable shorting in this environment but since I can't I will stay away from trading as I am leaning towards preserving my capital so that when I add to it at the end of this month I will certainly be above the $2,000.00 margin requirement. I know that my goal is to get a 20% return for the month but I am not going to force longs in this environment and end up drawing down my account 20% in the process. I much prefer to preserve my capital and then at the end of the month after adding savings being above the margin threshold. This would give me the flexibility to short which will be crucial if the markets fall into a correction. Further when easy money making conditions emerge again I am certain I will make up for the months in which I underperformed!

Hope this helps. Good luck and good trading!

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