June 22, 2007
Stock Du Jour (HOKU) & Random Observations
A little hesitation at the start of the day but buying kicked in after 10 AM and continued all day… a very decent day of strength.
Notable New Lows: Starbucks (SBUX), Homebuilders Pulte (PHM) and Hovnanian (HOV), Heelys (HLYS), and UTStarcom (UTSI).
Notable New Highs: Anything China-related, BHP Billiton (BHP), Liberty Global (LBTYA), Semiconductor HOLDR (SMH), Ciena (CIEN), Transocean (RIG), Tyson (TSN), and Nvidia (NVDA).
HOKU was the stock du jour, slightly conspicuous doing 38 times normal volume. Everything came together for Dummies: good market tone (longs get a tailwind), an unusually active and volatile stock trending strongly making 20 bar highs, followed by a lovely little narrow range bar that formed a swing low for stop placement. Catching this one trade would make your week (and maybe even your month).
June 22nd, 2007 at 10:52 am
With the dummy entry around the red bar that swing low, wouldn’t you have been stopped out at 8.07 before the large climb? That’s what happened to me! I couldn’t believe it when looking at the chart now.
June 22nd, 2007 at 12:06 pm
Whoops, my fill was actually at 8.23 when the bar with the high tail on the upside (whatever the corect name is) was forming. Got stopped out at 8.07. Any suggestions for how that earlier dummy entry should have been avoided? I was looking at 15 min charts.
June 22nd, 2007 at 12:16 pm
EC: The earlier Dummy entry looks fine to me too; did you put your stop below the inside bar or the bar you were filled on? It’s always best to have a swing to put your stop below, but in the absence of a swing stop placement is more of a judgment call. Putting the stop below the low of the entry bar is very aggressive (very tight) and will result in more stop-outs than if you give the trade a little breathing room.
June 22nd, 2007 at 1:39 pm
I put the stop just below the bar I used to enter off of - ie just below the blue bar which is right before the bar with the very high tail. Did you mean placing the stop below that bar (blue) is considered aggressive? I thought that was how we found a low risk spot to enter.
Hope we have a good tending day tomorrow to are how goes.
June 22nd, 2007 at 9:08 pm
EC: I took this trade off the same bar you did - 5th 15min bar - so it didn’t make my month ;-), I wasn’t stopped out as I only tightened it later in the day. Btw a fill of 8.23 when the previous bar is 8.14 is way too far for a sub $10 stock.
June 23rd, 2007 at 8:36 am
@EC: No, that’s a decent place to put the stop, aggressive would be under then entry bar with the long tail. Where did you get stopped out?
@Eyal: If you didn’t get stopped out, why didn’t it make your month? It was a huge move.
June 23rd, 2007 at 8:41 am
What is the big deal on this stock at this point? Are you following it to short it? Seems to be a waste of energy of an obscure event? What am I missing? thanks
June 23rd, 2007 at 8:53 am
Jack: It was the stock du jour and made good money for day traders on the long side on Thursday … it’s still on the watch list and will be as long as it stays unusually active and volatile.
June 23rd, 2007 at 10:20 am
Actually CM I made a dumb non dummy move of placing the stop at 8.07 because of my bad slippage tisking more than my original planned R.
For some reason Etrade Canada won’t let me do automatic buy stops so if I don’t watch the orders carefully I might enter a market order late.
My lesson is that perhaps I shouldn’t let slippage cause me to raise the stop, but to raise the r slightly instead.
Do you have a page with your stocks to watch list on this site as well?
June 23rd, 2007 at 2:55 pm
EC: I don’t publicize my watch list, but I plan to reveal all when I launch my new site, sometime around 2010. ;-)
June 23rd, 2007 at 3:33 pm
CM: The qty was recuded a bit to allow for low cost stock slippages, I took a 1/3 partial around 9 I think and my R is lower than usual this week. So it made the week but not the month :-)
June 23rd, 2007 at 3:50 pm
Eyal: I assume another trackball is in the mail. ;-)