"Water shapes its course according to the nature of the ground over which it flows; the soldier works out his victory in relation to the foe whom he is facing. Therefore, just as water retains no constant shape, so in warfare there are no constant conditions."
-
Sun Tzu

Sunday, September 23, 2007

Game plan next week

Let the profits run...
It's almost unbelievable: a month ago, we were talking about recession and stock market crash and this week the indexes might even come back to all time highs. Welcome to the stock market.
Since I'm fully invested I'm not looking to add positions but for possible profit taking points.

Enjoy the ride.

Friday, September 21, 2007

Update Sample Trade JEC

OK, this week worked out perfect. Rate cut with a nice rally. What did we do with JEC?
So far, nothing. JEC broke out from a two month consolidation zone. It wasn't really a classical breakout. More a continuous uptrend since August 20. We're now waiting for a pullback to the 70-72 area until we get into the stock again. That can happen already next week, so as always, stay tuned.




Saturday, September 15, 2007

Game plan next week

Despite all the guessing that is done in the media,trying to anticipate what the FED will do next week is like going into the casino.

What surprised me last week was the resilience of the market, since we had quite some negative news out there. Obviously, the market bets on a rate cut. So even a .25% cut is probably priced in and would lead to negative short term price action.

A lot of contradicting factors. My game plan: increase cash and update my stops.

My gut feeling (which I don't like to trade on :-) ): there will be no rate cut since the economy IS still strong (but deteriorating) and the FED doesn't seem to be a fan of a "preemptive strike" policy. ("We will act, when we have numbers")

Saturday, September 8, 2007

Sold: Sample Trade JEC

On Friday, I closed the JEC position, after the short term uptrend reversed at the resistance and the price target was achieved.
Overall 9% in profit. That's where I want to be with a successful short term trade. The question is: how do we go from here? I'll have JEC on my radar and wait for two different scenarios:

a) We'll return to the $60+ level. In that case, the whole game starts all over again.
b) We'll break out above $70. In that case, I'll scale in as well.

Note, that I'm not going short on that position (which could be valid if I aggressively trade the trading range).
Shorting would violate one of my trading rules: don't go against the major long term trend (which is obviously up).

The final chart with entry and exit points:

I think I will post my future trades on JEC here as well. I'll keep the stock on my radar as long as fundamentals and long term trend play out.

Happy trading

Michael

Wednesday, September 5, 2007

Update Sample Trade JEC

Guess it's time for a update on the JEC trade from the last post. Well, the trade has worked out so far. The position gained almost 11% since I bought it. Since we reached our price target at $68, should we sell?

According to my trading strategy, the answer is NO! In my world, reaching a price target means "ready to sell".
I'm now looking for some short term trend reversal indications. So far, we have good momentum with rising volume and there is a good old rule, which says "let the profits run". Nevertheless, I can be out any day now.

Here is an updated chart:



Stay tuned...