Underexposed - American Stock Journal (long term)

January 4th, 2015, 11:03 AM

bobwest

The joke about Amazon for years was that someday it will actually have a profit. It was regarded by many as a ridiculous company, pouring money into a big hole with no profits for it.

Someday, it did....

People were willing to buy it based on their idea of its prospects, when it had done nothing but lose money. That doesn't mean this is, in general a good idea -- many companies seem to have good prospects at some point, but few prove out in the end.

But there was a reason some investors liked it, and it worked out. No particular point to this, other than there is more than one way to slice things, and it depends on what you're looking for.

Bob.

I hear you... It is expectation/hype that drives the price and for day/swing trading that is fine...but it is risky. As you point out Amazon is an exception but look at Facebook...hype (not fundamentals) brought in the IPO at $45 but it quickly fell to about $18... where it stayed for about a year until it demonstrated it actually could make money. Those who bought into that hype gambled and lost.... I say lost because those people would not have held the stock for over a year to make a dime.... at least that is true for most non-company employees.

For me, those expectations are not buys... unless of course you understand the sector and company very well.... (for example my $0.28/share mine I was talking about last post.... I understand that company and its commodity/sector so the reward is worth the risk there for me).

I find in American stocks that hype is a stronger driving force than that for most Canadian stocks. We have our hyped stocks... some gold stocks are like that... a classic case was BRE-X in the 1990's...a scam that fooled everyone and had its share price driven to $25...no gold in the mine... but this was a classic too-good-to-be-true stock ... fodder for the greedy

I don't put money into "exploration" companies in mining and O&G.... they are just selling dreams. O&G is not as bad as mining. It takes about 10 years from discovery til producing mine and lots can go wrong to make that fail.... of course the dream merchants don't tell you that.

Jim

January 5th, 2015, 11:38 AM

Here is an L2 look at the last stock I said I would buy... Radiant Logistics [NYSE:RLGT]

As you can see we crossed and recrossed my bid price of $4.35 so I can assume that were my order for 4000 shares at that price would have been executed.

So now I go looking for another stock.... On Wednesday I will make my first update on the state of this portfolio...as I have done bi weekly with my Canadian portfolio.

January 6th, 2015, 03:14 AM

ok...next stock will be a pharmaceutical ....Sucampo Pharmacueticals INC [NASDQ:SCMP]

It is late and I won't spend a lot of time on this post

I will make a limit buy for 2000 shares of Sucampo Pharmacueticals INC [NASDQ:SCMP] @ $14.03/share as always I will hold back the order for 15 mins or so to see if the price falls below $14.00 then if it does I will follow it down til it hits bottom and buy it there.

January 6th, 2015, 11:29 AM

ok...I waited a while before I decided to buy into SCMP but here is the reason for considering the buy

On an FA basis about $70million in debt with 2/3 of that being current debt and overall it has been like that for a year now

Its operating income is currently $36M rising from $21M a year ago and it makes $1M - $2M in net revenue/quarter

Stock Market Quotes | Company Financials, Financial Information

I normally don't like BioPharmaceuticals because most do not make money and seem a money pit of debt. It is not unlike a prospector finding an ore body and touting how great the mine will be... dream sellers

But Sucampo Pharmaceuticals Inc. (SCMP:NASD) has an Operating revenue stream that is rising and the debt is relatively stable.

Here is the P&F chart

You can see the battle over the resistance level at $14.25...the risk is there of a failure to pass this resistance but the reward should be fine if it does

Here is the Trigger chart

Well we are taking a bit of a gamble here since the stock is not in Breakout yet. It looked better last night but is not terrible right now as we have only fallen to the 20daySMA....so far

So last night I decided to buy at $14.03 BUT I said I would wait to see what would happen after 15 mins into trading before placing the order.

Well I did and here is the L2 screen

As you can see the price went wild at the bell... 15 mins represents the first 5 candles and you see the Bollie channel that formed so I decided to wait it out and sure enough it fell....

And it is still falling

Conclusion

this is a lesson in not getting carried away with emotion AND WAITING for the trigger to show the direction.

This may still be a buy as there is a support at $14.35 though that has been breached as well that support should have been strong as it is also supported by the diagonal support....

We shall see if it retreats to close over 14.35 by the end of the day.

So... by waiting and watching the price in L2 I have dodged a bullet and not put in an order.

Wait for the trigger to be pulled before placing an order....jumping the gun is gambling and I was almost guilty of this...luck more than brains this time.

January 8th, 2015, 11:29 AM

Well not an auspicious start to this portfolio but hopefully it will get better.... My batting average is not so hot with American stocks as mentioned before

here is the financial look at this new Portfolio

more stocks to go until I am all in

January 10th, 2015, 01:23 AM

weekend portfolio status

January 14th, 2015, 06:38 PM

Well I have been quite sick for the last few days and have not paid attention to either my American and Canadian fantasy portfolios.

When it came to the update today I expected the American one here to be down but actually it has risen much to my surprise.

Here is the chart

Still lots of dollars on the sidelines but not in a rush to spend it right now.

January 17th, 2015, 12:06 AM

well I was surprised at having a positive week... on my Canadian journal you won't see such a good result there but even there it is not as bad as it was at mid week...it has been brutal in the Canadian market

but not so much here...I had my first good positive week

another week like this one and I will be where I belong

in positive return territory.

I am still looking at Sucampo Pharmacueticals INC [NASDQ:SCMP]

here are updated charts on the stock

I am nervous about buying into this stock.... as you can see this stock has a history of rapid rises followed by terrifying plunges. This is one of the longer times at the top but it has been quite a volatile one. You can see the rising wedge that has formed and that is historically bullish.... but that $14.40 level looks to be a mountain of a barrier

you see the similar wedge in the Trigger chart and frankly the price though a slight neg drift is well placed ...right on the 20daysma as the BB get narrow.... but you look at the indicators...the story is not as promising

they are not negative particularly ... well maybe the MACD is

The MACD has had a continual decline since mid-Dec... you would like to see a bottom to this...lately there is a hint of a bottom but not enough to say it is real at this point

The Slow Sto is has been bullish for a long time...since mid Oct and only just fallen out of the bullish as of Jan 1... it recovered a bit but could not reenter that bullish range

the BBwidth has ratcheted up the closure of the BB's so it is well within the breakout level.

the problem is that unless the SlowSto and MACD reverse their directions the breakout will be bearish.... not bullish and that P&F pattern of beautiful rises followed by spectacular crashes may repeat.

For now SCMP is a watch..... I won't make the same mistake as I almost did a week ago... I will stick to my knitting and wait for a definite sign and not anticipate one.

January 21st, 2015, 03:42 AM

Well Sucampo Pharmacueticals INC [NASDQ:SCMP] had a great day but why have I not bought it yet.... well the TA will show the reason.

Here is the P&F chart

Well such a break through of that resistance line, I perhaps should have bought some of this company...a one day 11% swing after all....nice......

but then I look at my Trigger chart and I say whoa....

first look at the share price level in the magenta circle. It is miles above the upper BB. It should pull back after such a leap.... if it moves sideways to re-enter the BB envelope I still might buy it.

When I look at the indicator response to such a nice gain and I am underwhelmed .... the three indicators barely budged.... not impressed at all by this.

This looks like a head fake to me... maybe not but I am not liking it .... we shall see.

January 21st, 2015, 03:37 PM

well is is not a guaranteed head fake but the first stage is completed...here is today's trigger chart

See the pullback after leaping over upper bollie??? When it pulls back so strong this is a very bearish sign... notice the muted response to that rise yesterday which is immediately blunted. Now if you look at yesterday's P&F chart for SCMP you will see that the current price of $14.86 has fallen back almost to that red line which was a resistance but now is acting as a support... with this action I don't think that "support" will hold.

This stock has a history of unpredictability long term... it is off my watch list but it was at least useful in illustrating how I see head fakes

Underexposed - American Stock Journal (long term)

Discussion in Trading Journals

Underexposed - American Stock Journal (long term)