Looking for the "stormy weather" stocks.

 What do I mean by, "looking for the stormy weather?"  Quite simply, you can only make money on a stock if it is moving... or if it pays a dividend.   As a trader, you need a stock to be active.   You can't be trading stocks that are not moving.   Also, when you identify a stock that is moving, you don't know how long the move will last.  How many times have you bought a stock when it was really active, only to see it calm down and become "blue sky, sunny and no wind" or "dead."  As in dead money.  

So, the key is identifying a "stormy" stock.  Trade it.  Be out before the storm stops.   Move on to the next "storm."

That's the goal - each day. Trying to focus on quality and if they're working great but I don't want to exchange my time for hoping during the day. Either its working or I'm moving on.

Trade Rotation (float)

X - ATGL Short

 

Here is a trade I took on the short side.  This trade did not work out and I held on to it way too long.   I did not obey my $0.10 stop, which would have been $24.11.  

K - ATGL Trade

 

This was a trade I took based on my ATGL system.

1) Stochastic heading higher between 18-20.
2) Must close green (NOT solid) before buying (you can buy at end of day is likely 
to close green.
3) Set stop $.10 below the low of first green bar of buy signal.

VDSI still going

I was pleased with VDSI today as were many others in this stock who are long. As you know, I added this one to my 401(k) about a month ago. We can't expect VDSI to do this every day but lets hope it continues its upward movement. I am still long VDSI in my 401(k).

bad base

As mentioned earlier, I sold JSDA. Too many negative happenings. To name a few:

1. bearish candles (Bulls can't win lately)

2. OBV down

3. Support is being tested and broken.

4. MACD made lower highs on stocks new highs.

I don't feel comfortable being long on this one right now!

The base here seems a little loose as well. (Good bases normally fall 20% to 40% or 50% from their highs. Go any deeper and a stock faces even more steamed holders that have a loss. It's tough to overcome this "overhead supply" of potential sellers and hit new highs. this from IBD)

Institutions are the ones that support stocks in their bases. You want to hitch your wagon with them not the retail side.

Sold JSDA

I took JSDA out back to the woodshed today. The stock just doesn't seem to have any strength. The bears seems to get this stock every afternoon. My feeling is that the retail accounts are buying in the AM and the Institutions are selling during the day. Anyway, I am not going to wait around to see what happens. Sold at $13.67. Shit...

JSDA showing weakness

Well, JSDA has been a poor performer the last couple trading days. If the stock breaks below its prior resistance, we are going to have to jettison this puppy. To think this stock was gong to trend. Now looking back at the stock, it is too volatile to trend. There is too much emotion attached right now. Take a look at HMSY. This stock just moves along, nothing too fancy. Just slow and steady, the way I like it.

JSDA did offer some great opportunities to make some money. I was using the wrong approach though.

AM Notes

Yesterday VDSI was downgraded to Hold from Buy. The stock naturally traded lower. I have not touched this position and continue to hold my shares. I did not see shares pierce any key support areas on the chart. Lets assume the trend is still in place for now.

JSDA has held its ground. I still have my shares bought at $14.49.

AM Notes

The market seems to like the Feds action or inaction I should say. Investors are also bidding up the VASCO shares.

I bought JSDA the other day at $14.49. Funny thing, I don't know if you noticed but take a look at HMSY and JSDA charts and notice the same pattern in each. HMSY is going up now but Jones is down. The only thing I can think of is that the slope of the trend line for JSDA is steeper than HMSY. Maybe a little too steep. I am sure Cramer's comments did not help JSDA either but that can't hole too much weight. Anyway, I am holding onto JSDA.

VDSI / HMSY

I continue to hold VDSI in my 401(k). The stock look solid still. It is stabilizing after its last run up.

Another stock that looks interesting is HMSY. The stock, much like VDSI has been going through a basing pattern after its last move up. Today the stock moved higher. I do not own HMSY.

How Many Stocks to Watch?

• Pick only 1 or 2 issues to watch. You are more likely to do better by following a few stocks well than following a bunch of stocks poorly.
• Use both physical stops and limit orders to control risk.
• Successful swing trading requires little knowledge about the companies underlying fundamentals.

VDSI

Like I said, I sold VDSI in the trading account and held it in the 401(k). I bought VDSI during wide price bar action, which is risky. I should have waited for the stock to "cool" before purchasing.

Expansion - Contraction

• Price bars tend to expand during rallies and sell offs.
• Then congestion sets in.
• Volume drops and price bars narrow. (I know - the Empty Zone!)
• Then, pressure builds up and the price starts moving again. (Positive feedback)

Sold VDSI in Trading Account - holding in LT Account

I sold VDSI in my Trading account today at $14.10. However, I am still holding the issue in my 401 (k) account. Technically, this issue is not something you want to be holding long. I thought the stock may find support around its 13 day MA but no such luck. I am guessing the stock will bounce around $13.50 to $14.75. I think the market is now waiting for the Jan. 31st conference call.

Trend/Range

• Positive feedback tends to surge in waves.
• Negative feedback allows the trader to enter a low risk position.
• Enter positions when the range nears primary S/R and watch for momentum in the next lower time frame to carry the trade to a profit.

Bollinger Bands

A good tool to measure central tendency of price.

• Enter fade positions when price hits the top or bottom band.
• Look for bands to tighten around dull markets.
• Consider shorting when the price pops more than 50% out of the top band and go long if this occurs on the bottom band.
• Odds favor price falling all the way to the bottom band when the central pivot breaks.

Moving Average Ribbons (MARs)

Expect choppy price action during phases when the averages criss-cross out of sequence. Price can bounce around like a pinball several times before breaking free when it gets caught between inverting averages.

MARs allow quick examination to locate classic retracement levels to use for entries on the next pullback.