Category Archives: Anatomy of a Trade

Anatomy of a Trade: Titan Machinery Inc

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Anatomy of a Trade: Titan Machinery Inc

Date Provided to Members: April 17 2012

Service: Chart of the Day

Entry: $32.37 (average)

Target Price: $36.25

Profit: $3.88 or 11.99%

Days Held: 14

Comments: Here is what we had to say on Wednesday, April 18th, as delivered in our Chart of the Day that we provided to our members::

“TITN is a $688 million specialty retailer that owns and operates a network of full service agricultural and construction equipment stores in the United States and Europe. Technically, TITN made a beautiful breakout a little more than a week ago, clearing the April 2011 high. The selling the past few days was warranted given the very overbought conditions. There is solid price support in the $32.00 area, which is where we expect the buying to resume. Therefore, we like entry at the current price and again at $32.00 with a closing stop at $31.75. Consider $36.25 to be a short-term target.”

Update: TITN performed beautifully. After pulling back to test $32.00 price support – where we were able to enter at both $32.75 and $32.00 – TITN recovered very quickly and tested its previous high just above $36.00. Our target was $36.25, which was hit intraday on May 1, 2012. TITN remains quite strong, but is current trading within a $31.98-$36.25 range. Until it breaks out, consider trading the range.

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Anatomy of a Trade: Amarin Corp PLC

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Amarin Corp PLC

Date Provided to Members: April 15 2012

Service: marketJOURNAL

Entry: $9.55 (average)

Target Price: $12.15

Gain: $2.60 or 27.23%

Days Held: 11

Comments: Here is what we had to say on Sunday, April 15th, as delivered in our marketJOURNAL that we provided to our Diamond members::

“AMRN broke out in mid-March above 9.35 resistance. It has slowly drifted back to that level on much lighter volume. We like entry at the current price and again at 9.40, with a closing stop beneath 9.25. Our target would be 12.15. Should support in the 9.25-9.35 area be lost, there are not many reasons for techical buyers to buy until the trendline support is reached.”

Update: AMRN pulled back, touching both entry points – $9.69 and $9.40 – and holding above $9.25 closing support before turning higher. On Friday, it moved above our $12.15 target, triggering our sell and a 27% profit in just two weeks. Technically, it’s now at key short-term resistance, though a breakout above $12.25 on heavy volume would be bullish. There is now a cup in play with a potential handle down to the rising 20 day EMA an opportunity for re-entry.

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Anatomy of a Trade: Hot Topic, Inc

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Hot Topic, Inc Stock Charts

Date Provided to Members: March 18, 2012

Service: marketJOURNAL

Entry: $9.68

Target Price: $10.30

Gain: $0.62 or 6.40%

Days Held: 2

Comments: Here is what we had to say on Sunday, March 18th, as delivered in our marketJOURNAL that we provided to our Diamond members::

“MACD looks very solid here, as do recent volume trends. We like entry at the current price and again at 9.49, with a closing stop beneath the rising 20 day EMA, currently at 9.27. Our target would be the 10.30-10.40 area.”

Update: HOTT pulled back to $9.50, missing by one penny triggering the second entry at $9.49. However, HOTT never was close to being stopped out, then rallied quickly to our expected $10.30 level just two days later. That resulted in a 6.40% gain in just two trading days! HOTT later moved to a fresh late March high, but did so with a big red flag – a long-term negative divergence in play. It has since been struggling, although a reset of the MACD at the centerline and a 50 day SMA test could produce the next buying opportunity on this stock technically.

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Anatomy of a Trade: Samson Oil & Gas Ltd

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Anatomy of a Trade: SSN

Date Provided to Members: April 1, 2012

Service: marketJOURNAL

Entry: $2.47

Stop Price: $2.37

Loss: $0.14, or 4.05%

Days Held: 2

Comments: Here is what we had to say on Sunday, April 1st, as delivered in our marketJOURNAL that we provided to our Diamond members around noon:

“SSN broke out above prior resistance on very heavy volume and has since slowly worked its way back to price, trendline and gap support. Given the RSI now in the 40s and SSN trading with so much support near current price, now seems like a good opportunity for entry. We like entry at the current price with a closing stop beneath 2.38. Our target would be 3.05. If you prefer giving this one a bit more room to the downside, 2.25 would be the next support area to watch.”

Update: We’ve said many times in the past that the best trades sometimes are losses. Why? Because the discipline that you instill by swallowing your pride and taking a small loss many times will save you from having to figure out how to climb out of a deep hole by hanging onto a stock that is technically broken. SSN failed us. It was a bad call. On April 4th, SSN closed at $2.37, a penny below our closing stop level – and on the heaviest volume it had seen in over two weeks. Following a disciplined stop would have resulted in roughly a 4% loss. Just four days later, however, if SSN was not sold, it traded as low as $1.87. At that level, a 4% loss had ballooned into a 24.3% loss. Then panic sets in and rational trades are no longer possible. ALWAYS remember to keep your stops in play!

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Anatomy of a Trade: MBIA, Inc

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MBIA Inc

Date Provided to Members: March 13, 2012

Service: Market Chatter

Entry: $9.59 (at the time mentioned in the Market Chatter)

Subsequent High Price: $10.43

Potential Profit (Loss): $0.84, or 8.75%

Days Held: 2

Comments: Here is what we had to say on Tuesday, March 13th, as delivered in our Market Chatter that we provided to our Gold and Diamond members around noon:

“Here are a few max pain candidates that are oversold and could potentially benefit from market maker interest as Friday approaches:

MBI
ANR
FNSR
HPQ“

Update: Of the four max pain candidates identified, MBI and ANR provided solid opportunities for profit, while FNSR and HPQ traded mostly sideways. MBI is not a healthy stock technically. In fact, last week’s move higher tested MBI’s 20 day EMA from underneath. Given that the daily MACD is so weak, it’s quite possible that last week’s high will mark a near-term top. Another move lower with a higher MACD on the daily chart might be a better indication of a longer-term bottom approaching.

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Anatomy of a Trade: ATP Oil & Gas Corp

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ATP Oil & Gas Corp

Date Provided to Members: February 28, 2012

Service: Market Chatter

Entry: $7.90

Intraday High Price: $9.50

Potential Profit (Loss): $1.60 or 20.25%

Days Held: 3

Comments: Here is what we had to say on Tuesday, February 28th, as delivered in our Market Chatter that we provided to our Gold and Diamond members around noon EST:

“ATPG – had a very nice, heavy volume breakout on Monday and is pulling back a little today. Entry in the 7.90-8.00 range would be ideal, but you could consider an initial position here. There is a very decent chance that the downtrend has ended and ATPG has begun a series of higher highs and higher lows. It’s a bit of an aggressive trade, but one that looks good.”

Update: After providing ATPG to our members in the Market Chatter on Tuesday, ATPG literally dipped just beneath $7.90 two hours later to trigger entry. By Friday’s intraday high of $9.50, ATPG had soared $1.60, or 20.25% in just three trading days.

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Anatomy of a Trade: Jinkosolar Holding Co

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Anatomy of a Trade: Jinkosolar Holding Co

Date Provided to Members: January 29, 2012

Service: marketJOURNAL

Entry: $6.55 (average)

Target: $9.75

Profit (Loss): $3.20 or 48.85%

Days Held: 10

Comments: Here is what we had to say on Sunday night, January 29nd, as delivered in our marketJOURNAL stocks that we provided to our Gold and Diamond members for Monday, January 30th:

“JKS may require some patience and it should only be considered by aggressive traders, but the recent high volume move through the 50 day SMA and the recent golden cross (20 day EMA crossing above the 50 day SMA) suggests serious technical improvement here. Entry from the current level down to the 20 day EMA makes sense with a closing stop beneath the 50 day SMA. 7.40 would be a short-term target, although we believe a test of the late October high near 9.75 is likely in time.”

Update: JKS hit our initial target very quickly and – in just TEN DAYS – hit our ultimate target of $9.75. Patience to enter from our initial price near $6.80 and again at the 20 day EMA (approximately $6.30) would have resulted in a 49% gain in less than two weeks!!! Clearly, this was an aggressive trade that required considerable risk, but these are the types of returns possible in higher risk trades. JKS was suggested at the same time as BVSN and both have proven to be 2 of the best setups in our history. If you recall, BVSN was up 64% in one week. Continue to watch JKS. We’d need to see another breakout above $10.00 before growing more bullish. Until that occurs, pullbacks to the $7.25-$7.50 area look buyable for those with high risk tolerance levels.

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Anatomy of a Trade: Silvercorp Metals – SVM

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Anatomy of a Trade: Silvercorp Metals - SVM

Date Provided to Members: December 29, 2011

Service: Chart of the Day

Entry: $6.34 (2nd entry at $6.00, which never triggered)

Target: 50 day SMA ($7.35 hit on Thursday)

Profit (Loss): $1.01, or 15.93%

Days Held: 13

Comments: Here is what we had to say on Thursday night, December 29th, as posted in the Chart of the Day that we provided to our members:

“SVM is a $1.06 billion basic materials company that engages in the acquisition, exploration, development, and operation of silver mineral properties in China and Canada. From the chart above, you can see that Hecla Mining (HL) and Silver Wheaton (SLW) have both hit key price support levels. That was a common theme across many silver and gold stocks on Thursday. Reversing candles printed everywhere on this group. Therefore, we like entry on some of these names. Specifically, we’re pointing out SVM because in addition to the bullish engulfing candle at support on Thursday, it also has a slight long-term positive divergence that suggests the selling momentum is slowing. Consider entry at the current price and again at $6.00 with a closing stop beneath $5.85. Our target would be a test of the declining 50 day SMA, although SVM could see some selling in the $6.85 area first.”

Update: SVM rallied nicely off its reversing candle at price support with that long-term positive divergence. It never gave us an opportunity for a second entry at $6.00 as it never pulled back. But buying at the open on December 30th at $6.34 and selling at Thursday’s high of $7.35 at the 50 day SMA would have netted a very nice 15.93% in just under two weeks – not bad.

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Anatomy of a Trade: LinkedIn Corp – LNKD

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Date Provided to Members: November 30, 2011

Service: Chart of the Day

Entry: $60.65

Current Price: $67.89

Profit (Loss): $7.24 pr 11.94%

Days Held: 2

Comments: Here is what we had to say on Tuesday night, November 29th, as posted in the Chart of the Day that we provided to our members:

“LNKD is a $5.8 billion technology company that operates an online professional network. LNKD, through its proprietary platform, allows members to create, manage, and share their professional identity online, build and engage with their professional network, access shared knowledge and insights, and find business opportunities. November has been VERY rough for LNKD as it started the month above $90 per share while it managed to close at just $59.07 on Tuesday, the lowest close since it went public in May 2011. Volume the last two days has been heavy and LNKD printed a reversing doji candlestick on Tuesday, suggesting we could be at a near-term bottom. After losing one third of its market cap during November alone, it couldn’t happen soon enough for the beaten-down longs. If Tuesday’s doji is truly marking a near-term bottom, we should not see the intraday low eclipsed. Therefore, consider using $55.75 as an INTRADAY stop. We’d enter at the current price and again at $57.00 with a short-term price target at the rapidly declining 20 day EMA, currently at $72.31.”

Update: LNKD was simply a very oversold stock that needed some short-term relief, which is what we’ve been seeing. While our target is the declining 20 day EMA, which is currently at $71.00, LNKD did touch $69.73 at its intraday high on Friday. This comes just a few days after LNKD was highlighted at a MUCH lower level. Unfortunately, the majority of this advance has likely already been made. The daily MACD looks horrible and suggests that the 20 day EMA will likely hold back LNKD. That’s assuming LNKD even sees that test. If on the long side, we’d take profits and exit stage left.

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Anatomy of a Trade: UIS

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Date Provided to Members: November 17, 2011

Service: Chart of the Day

Entry: $24.64

Exit Price: $23.56

Profit (Loss): ($1.08) or (4.38%)

Days Held: 1

Comments: Here is what we had to say on Thursday night, November 17th, as posted in the Chart of the Day that we provided to our members:

“UIS is a $1.05 billion technology company that operates as an information technology (IT) company worldwide. We’ve been watching UIS for a few weeks now, since its recent quarterly earnings report. Investors received that report quite well, with UIS gapping up from $20.02 to $24.51. UIS continued moving higher, even after that significant gap up, demonstrating heavy accumulation. These types of gaps – breakaway gaps – are usually powerful and lead to outsized gains over the intermediate-term. After becoming very overbought a couple weeks ago, UIS has pulled back and is now testing the upper end of gap support, usually an excellent point of entry. Therefore, we like entry in UIS at the current level with a tight stop on any close beneath $24.00. In other words, we want to see it turn right here or we walk away from it for now. Our initial target would be the recent high near $27.50.”

Update: Last week we highlighted GMCR, showing how combining technical analysis with other areas of analysis (max pain with GMCR) can result in very nice profits. Well, this week we want to demonstrate the importance of taking a loss when a trade does not work out the way we expect. It many times will save a lot of heartache (and dollars) to exit a poor trade early.

UIS was in a pattern that we identified as a breakaway gap – usually a VERY bullish technical development on a chart. And in a better market, it may have worked beautifully. But last week, the market fell apart, losing many levels of support. Nearly every stock moved lower. UIS was caught up in the selling and violated our $24.00 closing stop one day after the trade was initiated. It represented a 4.38% loss. While that never feels good, take a look at the chart above to see what’s happened to UIS since that breakdown. It’s fallen from our stop level of $23.56 to a close on Friday at $21.20. That’s another 10% lower since we were stopped out. Trading isn’t always about making money. It’s about managing losses and preserving capital. If you don’t regularly employ a strict closing stop strategy, you may want to begin to do so, especially in the current market environment.

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