New Trade - SMH

One of my favorites to trade - SMH. I like SMH because it "acts right" and is highly liquid.

Overall XLK (technology sector spyder) is the leader in the market sectors. Couple that with the QQQQ's leading the markets higher, points to SMH (semi-conductors) going higher. Also remember, even though Halloween is just a few days away, that Christmas is ramping up. I'm sure you've noticed a few Christmas items here and there already (or even as early as September) - so this means that computer manufacturer's are ramping up production for the Christmas season and they need those semi-conductors!

Enough of that, let's just look at the chart:

First of all you can see where I recently profited from this trade. I always watch SMH and will trade it again and again. This trade will be different from the last as we broke a resistance level for 2 consecutive days - with increasing volume to boot.

So, my target is the next level of resistance up, which is seen on this chart around the $30.60 level or so. And, I'll look for the target just shy of that before any major sellers step in.

I bought the January 28 Call Option for $2.21. I'll watch this closely and might take profits early if we get a nice big pop (then will look for a re-entry). Or if we get any funny business, then I'll also take profit early.

Time to make the donuts.

LDK - took quick profits.

Took a quick profit today in LDK. This was a nice and quick 3 day move.

I got out today for a couple of reasons:

1. My ROI today was 24% - in just 3 days

2. We have a doji - after a little gap up, so some gusto was used up

I think it will continue up to the target, however I don't know how long it will take to get up there. I'd rather take quick and easy profits in this market rather than just leaving it on to get a few extra dollars.

I made $58 in 3 days resulting in a 24% ROI. Not too shabby. I'll take that every day if I can.

LDK - new trade

Time to punish those market makers again with a new trade.

This time it's a long call on LDK. Here's the chart:

A couple of weeks ago LDK broke above a level of resistance. It then went on to some nice recent highs before it pulled back, retested the old resistance/new support and now it's ready to bounce back up to those recent new highs.

It's a cheap stock and the move will only be about $1.50 or so, however that roughly a 12% move for the stock. So, it's a good move, and it should happen fairly quickly.

I've tweaked my long options just a bit by making sure I'm close to 90 days (or more) until expiration. This market isn't moving really well and I need plenty of time to hit targets. Even though this trade should only be a week or so, you just never know, better more time than less.

So, I bought the January 10 Call Option for $2.35. I'm looking to hit the recent highs, and if it goes against me, then I'm looking for it to break 2 levels of support: the first is the purple line on the chart, the second is just below that where the bulls were keeping the stock price from going lower before the breakout.

Another good thing for LDK is news - because we ALREADY KNOW what the news is: solar stocks overall are heating up and getting good reviews. LDK is a solar stock so this positive news should help us as well.

For now, we remove all emotion, we follow our trading plan above and I'm looking to hit our target in plenty of time before the option

MYL - partial profit taken

I took partial profit on MYL the other day. Why? Because it went up a little for me, but the earnings announcement was coming out the following day.

Here's the chart showing were I took initial profits:

Earnings are news. News is a gamble. A gamble is something to be done with money you want to never see again - think Las Vegas. I don't gamble in my trading. I take very calculated risk with many factors in my favor. So, I took profit. Right now, I'm completely out of the trade, so I do still think we'll hit the original target, however I'll wait for a new entry point for now.

I made $32 (yippeee), which is a 13% ROI profit. I'm happy with that, but it's not over yet. We'll add more to it later, for now, we just wait.

FWLT - a loss it is.

You never know what you are going to run into once you are in a trade.

One of the biggest problems we face as traders is news. Yes, news can sometimes work in your favor, but news is a gamble and we don't want gambles.

News came out in FWLT the other day that the CEO quit. So, that's bad for the company and therefore the stock dropped down - in a big way.

I gave it a couple of days to see if it would turn around, but it has not. I decided to salvage the remaining premium of my trade.

So, I sold the November Call today for $1.18, I originally bought the long November Call for $2.93. So, my loss was $175 and my ROI was negative (59%) - nothing to be proud of Russ.

However, you gotta take the bad with the good. So, the main point is to take your loss rather than let it take everything and make it a 100% loss instead of a 59% loss.

In any event, game on.

New Trade - MYL

Along with BBY, I also got into MYL. Here's the chart:

As you can see, first and foremost we are in an uptrend along with the rest of the overall markets. The stock went up, touched resistance and had a pullback then it went back up to resistance and broke up through it with a nice little uptick in volume as well.

MYL had news that a couple of it's generic drugs were approved by the FDA, so that will give it a bit of a boost as well.

The target will be the next level of resistance above, here's a longer term chart to show that:

Our target will be just before that resistance level - around 21.50 or so.

I bought the January 17.50 Call for $2.35, and you can see where the stop is located - just below bottom of the last pullback where the buyers came in to drive up the price to the current location.

Now that I'm in the trade, it's time to just be patient and let it go where it will - hopefully up to our target.

Ready for some Treats - no Tricks - BBY new trade

We're coming up on Trick or Treat time so I'm ready for some treats from the market.

The overall markets are currently in an uptrend. They have been just kinda grinding slowly higher with lots of sideways motion. However with the elections coming up and with some better than expected earnings reports lately, and the fact that the end of the year is closing in on us (i.e. the markets usually go higher the last couple weeks of December), then we've got some good reasons to be bullish. Oh, in addition to the trend being bullish of course.

Here's a chart of BBY:

As you can see it's currently in an uptrend and it just broke out of a sideways channel that it has been in for about 3 weeks. The break came out on news that it has been upgraded by an analyst from "hold" to "buy" and the price target for the analyst is $55. That really doesn't mean too much for us other than it can help give us a little push because that $55 could come years from now - or not.

You can see my entry in green and my stop is the yellow zone - if price closes down in the yellow zone it means that sellers are taking over control since the buyers held that line in the sand and our bullish trade is kaput.

My target is just shy of $45, maybe $44.50 or so, here's a longer view of the chart showing that my target is the next level of resistance above:

I bought a January 39 Call for $4.68. I imagine it'll take at least a month to get up to my target, but that's okay because we've got plenty of time. Now it's just time to remove all emotion and let this stock make us some profit - time for our treat.

SMH - small quick profit

A one day trade. I knew this would be a quick trade, I didn't get a snapshot of the chart when I got out, this snapshot was a couple of hours later as the stock traded lower.

I got out when the price was closer to the resistance line. I think the stock could actually go up and touch the line, but at the same time, since it already came quite close to touching the line it could just go sides (or even down) for an extended period of time. Before continuing upward.

So, instead of guessing where it's going to go next, I just took profit ("...a bird in the hand...").

I sold this option for $2.00. Originally bought it for $1.81, so I made $0.19 or $19.

So, I'm not ready to retire just yet, but this will buy a pizza. The ROI was just over 10%, actually not bad for a 1 day move. Do, that 20x over in a month and you've got some major numbers.

This is one of the permanent stocks in my watchlist, so I'll wait until we get 2 days close above this resistance line before getting back in for more profit.

I'm still in FWLT and will be keeping an eye out for the next trade.

Whipsaw Jumpy Markets

The markets have been so crazy and whippy over the past year or so, it's just knocking out traders right and left. I've been left with multiple wounds from my beatings as well.

However there is one thing you gotta learn and that is to just be cool and have patience. Don't get too exicited and let your emotions dictate your trading. You gotta have your entries planned in advanced, your targets planned in advance and your stops planned in advance before you pull the trigger on your trade. If you don't have those down first, and STICK TO THEM NO MATTER WHAT, then you will lose money time and time again.

So, when you get into a trade, do your homework and make sure you got everything solid on what you are going to do BEFORE pulling the trigger. Then, once you pull the trigger and get into the trade, you just need to relax and BE COOL....

New Trade - SMH

Today I entered SMH for a bullish trade. The markets lately have been just trudging sideways, however today they were quite strong and made some recent new highs - all on a Friday.

This means that the bulls are fairly strong since they are buying the market right before the weekend. Weekends can be tricky because who knows what kinda news is going to come out of them. In an uneasy choppy market, it's better to wait until Monday before entering once the dust settles from the weekend rather than getting in on Friday. So, this is a good sign for our bullish trades.

I like SMH for a few reasons:

1. It broke resistance

2. It broke above the recent highs - which coincided with the resistance

3. It did this on a nice bump up in volume

4. The overall markets had a decently bullish day

I'm not looking to make millions on this trade. I'm actually just looking for a very quick move up to the next level of resistance. This could actually happen in just one day - by Monday. The overall ROI will most likely be low, but as long as I can get a profit in just a couple of days then I'll be happy with it.

I bought the Nov 27 Calls for $1.81, so now we'll just wait and see what happens.

FWLT - update

Just a quick update on our trade. After our entry, the stock had a little pullback and then the bulls came back in to push it up higher. Today was a good day because we broke back up above resistance and closed above where the bears came in the day before and pushed the bulls back.

What's this mean? The bulls are in control right now, so hopefully we'll get a nice pop up from here and make our way up to the target.

For right now, we just sit tight and chill.