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Underexposed - Canadian Stock Journal


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Underexposed - Canadian Stock Journal

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  #561 (permalink)
SF, CA/USA
 
Experience: Beginner
Platform: SC
Broker: Stage 5
Trading: NQ....that's what it boils down to
 
jackbravo's Avatar
 
Posts: 1,337 since Jun 2014
Thanks: 4,316 given, 2,388 received

that's great that you've never blown a live account! beat me!

I've started to get into options recently with my ira account, just basic stuff, selling puts, etc. i've decided to never sell naked calls, which are the very risky strategies that blow people's accounts. it's definitely a different dimension learning options. tastytrade.com has helped a lot. i feel like with options, there's a chance to grow the account 20-50%, using the leverage. we'll see.

i've learned a lot from your analysis in this journal, especially using the BBwidth, which I never knew about before, and wanted to say thanks!

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  #562 (permalink)
Calgary Alberta/Canada
 
 
Posts: 934 since Feb 2014


jackbravo View Post
that's great that you've never blown a live account! beat me!

I've started to get into options recently with my ira account, just basic stuff, selling puts, etc. i've decided to never sell naked calls, which are the very risky strategies that blow people's accounts. it's definitely a different dimension learning options. tastytrade.com has helped a lot. i feel like with options, there's a chance to grow the account 20-50%, using the leverage. we'll see.

i've learned a lot from your analysis in this journal, especially using the BBwidth, which I never knew about before, and wanted to say thanks!

Thanks for the positive feedback on my TA. I wish you luck with your venture into Options. It takes years to get really good at doing something... and I am not prepared or willing to spend that time when I already am comfortable with my current trading approach.

But that is me... I like to specialize in one aspect of anything I do.

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  #563 (permalink)
Calgary Alberta/Canada
 
 
Posts: 934 since Feb 2014


What a rocky week!!!!

By midweek I was down about 2.7% ... I was even further down yesterday... but today I am still down but at least by a normal amount instead of disaster.




I am fully invested now in this portfolio....we shall see how things progress

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  #564 (permalink)
Calgary Alberta/Canada
 
 
Posts: 934 since Feb 2014

Well now....the price of oil jumps up and Canadian Stocks take off

I have not posted mid-week status yet but it is looking like a record week. I am up over 2% now instead of down a bit. Pengrowth Energy [PGF:TSX] purchased with great timing.... I am up over $1500.00 on this stock in 2 days

Wheeeeeeee......... (well at least it is not YIKES....not yet anyway)

In the stock Canadian stock market most Oil companies getting a shot in the arm.

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  #565 (permalink)
Calgary Alberta/Canada
 
 
Posts: 934 since Feb 2014

Well such a roller coaster....Today was a bit of a down day but overall this week looks to be positive.

The price of oil has fallen back to just south of $50. I find it curious in Calgary that in the last 3 days the price of gasoline has jumped from about $0.74/litre to $0.92... a more than 20% jump in price today in a couple of days. I am not sure how to read this .... if it means anything at all.... there will be howls of protests over price gouging...so I don't know if this portends higher oil prices or if this is some kind of marketing ploy....I believe it to be the latter as I believe North America is awash with supply.

Anyway, this week in the Canadian market has been pretty good and should continue to Friday .... after that who knows but the trend in the graph below, though choppy, is going in the right direction



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  #566 (permalink)
Calgary Alberta/Canada
 
 
Posts: 934 since Feb 2014

well we keep the mid week gains and even added another $100 in the last 2 days...Our gains were much better actually but for a pull back in the Enbridge Income fund (not serious) of about $2000 over the week





The big gainers this week has been Lundin Mining which has seen its losses cut nicely by regaining about $2000 this week.... actually this is probably one which I would soon be selling (next week or so) because I could use that money elsewhere.

Pengrowth Energy Corp has proved a nice recent buy gaining about $2500 this week and Chorus Aviation gained another $800.

hopefully this trend continues...looking good so far.

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  #567 (permalink)
Calgary Alberta/Canada
 
 
Posts: 934 since Feb 2014

right now I am fully invested as far as this fantasy portfolio is concerned. But this does not mean I am complacent about it.

I am constantly looking for better opportunities. I must free up some cash and as you have seen in my twice weekly updates the weakest company in the portfolio is Lundin Mining [TSX:LUN]





this chart is very revealing and I wish I paid attention to it on in early January. The blue arrow shows where the bottom fell out of this stock for a while... we shall look at my trigger chart in a minute but let us disect this chart for a while as there is lots of stuff in it.

I have had lots of hopes for this stock for quite a while... after all it is a profitable base metal mine (lead, zinc, copper) ... in times of bad metal prices ... and bad economy where manufacturing struggles. What goes through my mind is... wow... just this about how this stock will rise in good times.... rising base metal prices

So even though I was losing money on the stock I held onto it because I am always looking long term.

It is like a comment Wayne Gretzy made when asked why he was so successful as a hockey player... this is the essence of his comment... he said that he did not go to where the puck current was, he would go to where the puck was going to be.

I think this has to be your mindset if you are into long term trading.

That does not mean you hang onto a sinking ship forever believing that the stock will recover... odds are you should not have bought that stock in the first place.

So looking at this chart you might say... why in Hockey pucks did you hang onto this stock when it fell so hard???

Good question it will be answered later when I discuss the trigger chart.

Looking at this chart several things jump out at you....On early January when the fall began that broad resistance line looked like a solid support... we were above that support so it did not look like a bad situation.. it just looked like a normal pullback after testing the dotted resistance with support from the diagonal resistance.

But the roof fell in (rather the floor collapsed and the stock fell through that support ...now a resistance.

As I said we will discuss why I did not make a panic sale of the stock later.... I hung on and the stock has recovered.

It has passed through a resistance (now support) at $4.90ish the dotted line represents a minor resistance (now support) at $5.15.... NOW we are facing the monster resistance range from $5.45 to $5.50

We are in a bullish run currently... notice the upper Left "P&F pattern" ... An ascending triple top breakout is pretty bullish all right... the computer that Stockcharts uses predicts a rise to $6.75.

It may reach that level BUT I see at least 3 clear resistance levels AFTER the monster on that would have to be negotiated before that would happen.... I doubt it will be a linear rise.

I do expect the share price to attack the broad ranged resistance... if it were to pass that, it has tough sledding to get to $5.85 and it can fail any place in between $5.55 to $5.85.

But I expect it to get to and challenge $5.45........................

So what do I do???? That will be discussed after the "trigger chart" in the Conclusion

Let's look at the Trigger chart (never...NEVER... make decisions on the basis of a single chart... look for confirmations)





The Blue arrow shows the point of the decline....January 1.

Did I expect a breakout there to the positive.... NO!!! I hoped it would be .... if you look at the Slow Sto and MACD they were quite bullish until then... the BBwidth was pretty flat...a slight rise over the holidays but not sharp.... so No. it would have been nice but the BBwidth showed no sharp positive move to compliment the MACD/Slow Sto (that is why I name it my trigger chart... the BBWidth is the trigger)

So the share price did the normal thing after that failure...it fell back to the 20day SMA. the red circle show clues to the fall in the decline of the MACD and Slow Sto.... but things still looked fine... the 50daySAMlooked like a support too.

then the bottom fell out... I missed the first decline but the following drop was not something I would have responded to....Why??? Look at the green circle...

See the plummet BELOW the lower Bollie... that is over reaction to whatever caused the fall...the share price should pullback into the bollie envelope.... and it did as expected 3 days later.

Now is this a guaranteed bottom...heck no.... it could be just a rest and fall further.... so you watch your indicators

the Slow Sto climbs a bit... as does the MACD later...and the stock starts its march to the 20daySMA which is normal in a bottom recovery... the clincher is in the Blue circle... see the BBwidth/MACD "pinch"

Is the stock now bullish now.... nopes... it is in a decent positive consolidation phase but look at the BBwidth it has to fall to about 10-15 before you can get a break up or down... It is uncertain at this point.

Things look good...Slow Sto and MACD rising...but unpredictable at this point.

Conclusion

Ok...this is the situation as it stands now.

I need to free up money to buy a different stock (I will talk about that one in another post).

So do I sell outright??? I could do that but I would hate to see it rise further after the sale.
Do I hang onto it still?? Not really, potentially I could lose all the recovery gains.

the way I deal with this problem is to use a limit Stop Sell order and if it rises I will follow it UNTIL it drops into range and is sold. This way I give a chance for future profits while protecting myself from losing most of the gains I have made (or in this case protecting it from increasing losses)

You will note that I don't us any form of stop loss when I buy a stock.... I am pretty confident (not infallible but confident) in my purchases for the long term.

where do I set the limit stop loss range.... I use an intra-day chart for that





you can see on an intraday chart there is a resistance at about $5.20... it is being challenged now. I see decent support around $5.05... but nickels bother me... often a sipke will fall to the nickel level and bounce back... so I will set my stop a cent below and range down to $5.00

SO I will enter at Monday's bell a Limit Stop loss Sell order for 3000 shares of Lundin Mining [TSX:LUN] valid in the price range of $5.00 to $5.04


there won't be a time limit in reality but most orders have a life of one month in reality... I doubt it will take a month to decide to sell ... if it breaks that $5.20 current resistance we will trail it by about $0.10-0.15 as it rises.

Now you know what I propose doing .... AND WHY....

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  #568 (permalink)
Memphis,TN
 
 
Posts: 232 since Sep 2010

Good evening Underexposed and other traders following this thread,
a fellow member made the following comment...
" i've decided to never sell naked calls, which are the very risky strategies that blow people's accounts. it's definitely a different dimension learning options "

And I was wondering if someone could please elaborate on the reason why selling " Naked " Calls is so much more risky then it is to sell ' Naked ' Puts ?

My thinking behind it is because a stock can go to $0 , and because of this, the risk is that much greater, since selling Naked Calls is a Bearish strategy and you are expecting the stock to drop ?

I have also noticed that the Margin to sell naked calls vs naked puts is a lot higher as well


Thank you Underexposed for this thread,
Learning a lot and enjoy following your trade/commentary

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  #569 (permalink)
Calgary Alberta/Canada
 
 
Posts: 934 since Feb 2014


mdsvtr View Post
Good evening Underexposed and other traders following this thread,
a fellow member made the following comment...
" i've decided to never sell naked calls, which are the very risky strategies that blow people's accounts. it's definitely a different dimension learning options "

And I was wondering if someone could please elaborate on the reason why selling " Naked " Calls is so much more risky then it is to sell ' Naked ' Puts ?

My thinking behind it is because a stock can go to $0 , and because of this, the risk is that much greater, since selling Naked Calls is a Bearish strategy and you are expecting the stock to drop ?

I have also noticed that the Margin to sell naked calls vs naked puts is a lot higher as well


Thank you Underexposed for this thread,
Learning a lot and enjoy following your trade/commentary

Hmmmm.... I do NOT discuss or want to discuss options or anything regarding naked calls or whatever in this thread. Please take such a discussion to a more appropriate thread.

My journals are strictly for discussion the buying/selling of equities for long or short terms.

I have no expertise in the area of Puts or Calls... naked or otherwise and don't want a discussion on this in my journals...

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  #570 (permalink)
Memphis,TN
 
 
Posts: 232 since Sep 2010


no problem at all,
I will post in a different thread the question

thank you for responding, and I look forward to continuing to follow your thread

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