Hi everyone. The stock market rebounded nicely last week, and I suspect we will start facing some resistance near the previous all time highs. As a result, I think now is a good time to sell or go short for the near term (<1 month).
SPY daily chart below:
I bought more PRLD today after seeing how low the price was. I had one more limit order months ago set near 20 or 25, but since the price never got there in the 60 days, the limit order expired.
I bought another 155 shares at $16.15 today, which is double my share position. My average cost basis is now about 22 (previous 145 shares were bought at an average price of 28.88). The total risk on the investment (if the stock price went to 0) is slightly over 5% of my total account value.
PRLD weekly chart below. I’ve completed my final purchase of the stock and won’t be buying anymore.
Since I have some income from teaching now, I plan to use any money I save to buy more shares of BABA. I may also start a position in INTC or ABBV depending on their prices.
Indexes were down quite a bit early last week, but recovered to be slightly up for the week. Risk reward favors a move up, and many of the last pullbacks have ended after being down this size.
I recently started teaching Go (a strategic board game) as a fulltime job, and it has been extremely satisfying although it means I’m much more busy now. I’m glad that I couldn’t find a suitable corporate job in the 8 months I looked. I know I’ve found what I love when I forget that I’m supposed to get paid for my work.
Over time, I’ve learned to hold trades longer, so I’m starting to think more like an “investor” now. Holding trades or investments for longer has made it easier to continue doing what I love outside of the stock market. I still don’t like US equities in terms of valuation, and really like Chinese equities (especially BABA).
WBA weekly chart below. I’ve held for nearly 3 months now for slightly above break even. It almost hit my automatic profit exit at one point, but unfortunately didn’t quite get there.
BABA weekly chart below. It’s finally showing some signs of life, although I don’t mind if it drops to 130 because that’s where my last limit order is.
QQQ weekly chart below. Not much movement this week, and risk reward favors a move up.
Hi everyone, welcome back. This post is a bit late this week because I’ve been busy with some personal stuff.
I’m still holding my WBA swing trade, but will sell soon because earnings are coming up. BABA had a nice bounce today, but at this point it’s probably better for me if it drops to 130 (my last limit order) because then my expected long term returns are higher.
INTC and ABBV look like good long term holds (5-10 years+) because of the stability of the company from its’ cash flows. They both have a nice stable dividend as well.
INTC weekly chart below. I still really want to start my stock position in the 40-45 range, but that is about 20-25% lower from current prices.
ABBV weekly chart below. I want my average price to be at or below 90. However, that is still quite a bit lower, and the stock has a nice dividend yield of around 5% so I may start the position near current prices.
Hi everyone, welcome back. Markets continue a little lower this week, and look to open quite a bit lower tomorrow (Monday).
SPY daily chart below. Risk reward favors going long at market open for a day trade. A tight stop (no more than 0.5% of index price) is good. You would sell at market close or if the ~1% gap is filled.
I bought more DOYU because of its fundamentals and also because the technicals look decent. I bought my first position at $5.54 about 2 months ago (1% of my total account value), and now I’ve more than doubled the dollar amount of the investment by buying at $3.64. It is now ~2.5% of my total account value.
Book value is around $3.20 per share, so I don’t expect the price to go much below $3. I have another limit order at $3 which would make the position ~4% of my total account value.
DOYU daily chart below.
Hopefully my BABA limit order at 150 will fill tomorrow or sometime next week. My other limit order is still at 130, and I have slightly more cash if we continue even lower than 130 (like to 100).
Hi everyone, welcome back. Indexes dropped a little this week. Let’s look at the SPY (S&P500 index).
SPY daily chart below. The pattern has been a bounce from near the 50 day moving average (blue line below). Will this pattern work again this time?
I bought a full sized position in ACAD at 16.69 last week in my Roth IRA. Risk reward seems like a 3:1, ACAD could triple to near 50, or go to 0. I bought because of the price and because Baker Bros still own a huge stake in it.
ACAD daily chart below. I plan to hold for up to 5 years, but it could be near 50 within a couple years.
I didn’t buy any INTC for a long term hold, because I didn’t like my original plan after thinking about it more. I will likely still buy some INTC in the future, especially if it drops from current prices to the 40-45 zone.
INTC weekly chart below. I like the dividend yield and the cash flows of the company. It’s trading at a reasonable 12 P/E ratio, so when I buy it, I plan to sell it when it gets near a 25 – 30 P/E ratio.
I hope you had a nice weekend, and I’ll see you next week.
Hi everyone, I hope you had a nice weekend. The indexes grinded slightly higher this week and made new all time highs. Valuations are still extremely expensive, but I’m looking to buy some ACAD and INTC. ACAD is a pharmaceutical company that Baker Bros own a lot of, and INTC is trading at a 12 P/E ratio and 3 P/S ratio which are reasonable valuations.
ACAD weekly chart below. I was planning on buying it near 22 and 20, but didn’t buy any. Now it’s trading at just under 17 so I’ll buy it in my Roth IRA. I will enter a 2% of my account sized position because that’s the amount I’m willing to lose if the stock goes to 0.
Since the stock is trading in the lower end of the range near 13-17.5, I’m planning on holding and selling n the upper end of the range near ~40-50.
INTC weekly chart below. I plan to have a position that is up to 15% of my total account size. The stock pays a decent 2.6% dividend per year and is trading at a 12 P/E ratio and 3 P/S ratio which are reasonable. I will buy a 5% of my account sized position next week, and the remaining 10% sometime later near the bottom of the range between 40-45 (highlighted in the chart below). I plan to sell when the stock is 2-3 times higher than my average purchase price, or when the P/E ratio is between 25-30.
I covered my Aapl short position on Friday because it closed above 147. I exited before my stop loss or profit exit were hit because the trade wasn’t playing out as originally planned (took too long to make a move).
Aapl daily chart below. I took a small loss.
I bought more BABA at 165.49 this week for a long term hold (1+ year minimum). My position is a little bigger than twice the size of the original position that I started around 196. I plan to hold the stock for up to 10 years.
BABA daily chart below:
BABA weekly chart below. My average purchase price is now 179.49 so I’m down a bit. I still have limit orders at 150 and 130.
Hi everyone, welcome back to the blog. I hope you had a nice week.
Markets ended slightly higher this week, with volatility relatively low. I suspect a somewhat larger 5-10% correction is coming, and am still holding my AAPL short as a result, which I’m down a bit on. I’m still holding WBA, but sold M slightly above my profit exit at 20.24 (profit exit was at 20).
Since the M trades have worked out extremely well when I trade exactly opposite to where I think it’ll go, I’ll continue to trade the stock this way and see what happens. Of course, I’ll still follow my trading plan and use proper risk management.
M daily chart below. I’ve circled the area where I was extremely bullish (circle on the right), and the 2 times I was extremely bearish (middle and left circle). It seems like I have a good “feeling” of when the stock will go up.
AAPL daily chart below. I’m currently down about 0.35% of my total account value on this trade, and will exit at the end of this week if I’m still down (stock above 147).
I’m looking at going long AMZN soon. AMZN would be a nice trade to go long on because it is highly correlated with AAPL, so these two trades would hedge each other (since I’m short AAPL).
AMZN daily chart below. It seems like this pullback has a good chance to be over if we compare it to the size of the previous 2 pullbacks. One way to trade it is to go long now or very soon with a wider stop loss (stop near 3100, and profit exit near 3700). Another way to trade it is to wait for a price rebound, then buy on the next small pullback and use a tighter stop loss below the most recent low.
Like always, I’ll keep you updated if I decide to take any new trades.