Rebel Traders – Analysis Without The Hype

I’m selling WDC here now at $22.81.

The market is once again in the red and I feel it is getting weaker as the day goes on. WDC reports earnings after the market closes and I have a gain on WDC and I want to bank it. Holding through earnings adds an element of risk that I usually do not like to take.

As you get to know my trading style more and more you will see why I generally sell before earnings. There could be a good earnings and the stock will go up afterwards, but it could also go down. I have a gain right now. And a gain is a winner. Selling to lock in the gain.

This is why I said last night I was not recommending taking on any new trades today. Had I entered a new swing trade this morning on what was looking like a bounce quickly faded back down to a loss. Today is not the kind of day for entering a new swing trade. Volatility is really up there again this morning and best to sit one out and just guard what trades are already open.

I will be selling WDC before the end of the day to avoid a potential loss when they report earnings. WDC could report good numbers but I am seeing way too much “sell the news” now with the market being questionable. People are taking the gains of a good earnings report and cashing out on the spike. WDC is a gain in the RebelTrader portfolio and I want to keep it that way. Can always come back in at a later date if it presents itself as another swing opportunity.

The financial sector finally had some upward moves. That in addition to some good earnings pre market helped the market move into the green zone today. The DOW maintained the gain for most of the day however the S&P and the Nasdaq gave up some the of gains from the peak of the day around mid day. But at least it was an up day on all three of the major indices.

Also in the pre market was the news of the merger of Transocean (RIG) and Global SantaFe (GSF). A deal worth $53 Billion.

Today was just a taste of what is yet to come this week with many companies releasing their earnings. It will indeed be a busy week with companies reporting.

RebelTrader swing trades:

FEEC closed at $1.65, which is a gain of 5.7% from the entry price just this past Friday. When FEEC moves over $1.65 I will enter the second 1/2 of my swing trade.

WWAT continues to be a good mover. Closed today at $2.45 which is 33% up from my original entry point.

WDC closed up today at $22.89 and this swing trade stands at 12.3% gain from the original entry price.

NHWK closed up today at $21.36 and this swing trade is currently a 10.1% gain from the entry price.

I closed the AKS swing trade today because earnings are due tomorrow but the main reason is that there has been some recent earnings from other companies in this sector that had bearish outlook on the metals sector. I did not want to risk holding AKS through the earnings and possibly being exposed to bearish outlook from the company. AKS was closed at a break even (less than 1.0% gain).

The Rebeltrader portfolio continues to rack up good gains. Tomorrow I will continue to work on the new watch list items and more trade ideas.

“May the Bulls be with you” (yes, I’m a Star Wars fan!)

At lunch time the markets were in good shape. Even the financial sector was showing some signs of life!

The sectors doing poorly are housing, and Oil services/suppliers due to the drop in crude oil price today. Coal and Natural gas also down today.

Most of the other sectors are in the green at this time.

The big movers today in the Rebeltrader swing trades is WWAT, WDC, NHWK.

FEEC is pulling back on low volume so I have no worries about that. Does not need to jump up overnight (even though we would like all our plays to do that

I am patiently giving BIG some room to make a move. However if there is no significant movement by the middle of the week I will close the trade. Too many other moving stocks to play to just let this one sit and collect dust while it waits for the market to stop bouncing it around.

The Rebeltrader portfolio is making a nice gain today so far.

RebelTrader plays WWAT,WDC,BIG,NHWK, AKS all trading up. I expect to see GRP trading up soon.

WWAT already working on new highs again. NHWK running up quickly again this morning. Some good gains for the RebelTrader portfolio again.

The day started out with Biovail (BVF) releasing bad news stating that they received a letter from the FDA rejecting their drug submission. I announced this morning that I was selling my position in the pre market trading to close out the trade. I got multiple fills on my sale but the average sale price I got was $23.35. Recall that the trade on BVF was started on 7/13/07 with a 1/2 position. BVF never made it to the next step where I would have added the remaining funds to the trade. This is one reason why I scale into a trade. You grab the low price upon the technical parameters for the trade being met, then you add to the trade upon confirmation the trade is working out. With BVF it broke above the buy point on 7/13/07 and I entered the trade with only a 1/2 of my normal swing trade funds. Then BVF started pulling back when the markets came back down. So my trade on BVF never reached ‘full swing trade size’. By scaling into the positions I reduce the risk to my total capital until I see more evidence that the trade is going in my favor. Bad news from companies can’t be avoided, it happens to all of them at some point. That is why as swing traders we slice up our total capital into pieces and never put more than 10% of our total capital into any one trade. Limit the risk to your total capital… That is the only way to win in the long run. Never put all your money into one trade!

Even with the 10.9% loss on BVF today the overall RebelTrader portfolio gained an additional 1.02% today. Not bad considering the market was terrible today. Good gains from WDC, NHWK, WWAT helped the portfolio stay green today in this otherwise bad day in the markets.

This morning I highlighted a small cap stock that had a technical setup which looked right for consideration as a swing trade. I set two buy points, the first at $1.55, and the second at $1.65. The first buy point was reached today and I scaled into FEEC with a 1/2 position. When FEEC moves up past $1.65 I will scale in with the remaining 1/2 of my swing trade funds. FEEC is a company in the foreign energy market and is involved in the exploration of natural gas. This stock may not move instantly upwards overnight but the chart was right for an entry. I will keep a close eye on this one. The potential for large gains is there as is the case with many small cap stocks however it comes with extra risk, and that is why one should never play small cap stocks with all of your money. You should only have one active speculative play at a time in your portfolio. WWAT is the other speculative play I did and that has paid off very well. Even though I still have half of my shares in WWAT it is now in self sustaining mode. I have a stop loss set and the trade will close itself out if the price falls (and that will still be a profit) or I will sell the remaining shares upon the next price advance. Note: Today WWAT started moving back up again and is still looking good on the chart.

In the late afternoon I added to my position on NHWK. After the large move up yesterday I was anticipating a low volume pullback today and would wait for the next ideal point to scale in the remaining funds. But NHWK defied the broad market today and continued upward today. I added the remaining 1/2 of my trade at $20.76. I see NHWK being a trade that will probably be a couple weeks to reach it’s full potential. After a move like it has had the past two days there will be some profit taking in the stock but the chart is showing an increase in demand so I am looking for at least 10% total gain on this trade within the next couple weeks.

The broad markets were reacting today to the news from Caterpillar and Google. Both had less then perfect earnings and shock waves went through the markets today. In addition to that the financial/broker sectors continues to be an anchor on the markets dragging them down. We need to see a rebound in the financial sectors soon, otherwise this drag on the markets will start pulling harder on other sectors.

I want to thank Daniel and Michael for your nice comments today. Earlier in the month I said that I was going to post a series of articles on the basics of swing trading, a ’swing trading 101′ based on my studies and experience. But time has been hard to find and I have not had a chance to get the first installment posted here yet. But I will indeed keep my word and in time you will see here my series of articles on how I swing trade, what do I use, what I look for, technical analysis, and money management.

I wish all a great weekend !

Chuck (Fp80)

Not much to report here. Markets are generally down across the board. Computer hardware is one sector that is doing well as evidenced by my swing trade on Western Digital (WDC). Today it is up over 7%. That brings the gains of WDC up to about 15% so far.

FEEC is slowly moving up and as this attracts attention and buyers take a piece here and there I see this as being a good swing trade over the coming weeks.

WWAT is getting new buyers today and is working it’s way back up. Remember, I still have 1/2 of my position in WWAT and will essentially just let them ride the stock. When the stock seems to be done then I will take the gains on the remainder of the WWAT shares.

NHWK, the swing trade I opened yesterday is also doing well today. I was expecting at least a small pullback after yesterdays huge gain, but so far no one is selling. Good for us! That just makes the gains run up even faster for the RebelTrader swing trade.

The Google and Caterpillar news really set the tone for the early session. Profit taking is taking place in just about all sectors at the moment.

The RebelTrader swing trade WDC is up another 5% this morning!

I took a position (1/2 to begin with) in FEEC at $1.56.

Apple tried once again to break above $140 but has been selling off ever since. Will Apple hold the gains today? The way the charts read the answer is no.

The futures are down in the US markets this morning. And most of that in my view is on the bad news from Google last night(we also have options expiration today so that adds extra volatility). We also have Caterpillar (CAT) adding to the negative view this morning as they reported earnings this morning and they missed expectations by a fairly large margin.

I think Google sent their shareholders a wake up call. People have been buying up Google thinking they were infallible. But last night Google revealed that they are not so perfect as everyone (including analysts) have been touting. Google has been damaged and it will be a while before it trades back at the levels it was at. I see Apple doing the same thing. Everyone thinks Apple is perfect and they can never do any wrong. But one day Apple will have their own wake up call. It may come next week as Apple will release their earnings.

Earlier I had to sell BVF on news of a FDA letter telling the company that they were not going to approve one of their drugs. BVF has settled at support around $21.50 and already I am seeing some buying come back in as speculators are speculating that BVF will resolve the FDA issue and the drug will eventually be approved. But as swing traders we don’t want to wait for something that may never happen. We take our money out and move on. BVF was a loss but that is why we divide our capital up into pieces and only expose one piece to a trade. The goal is to always protect the total capital. A loss in one piece is made up in the gains of the other pieces. It’s all about having more winners than losers.

RebelTrader swing trade Western Digital (WDC) is trading up in pre market on upgrades and good earnings from SeaGate last night.

This morning analyst WR Hambrecht upgrades WDC to a ‘buy’. This will add some additional momentum to the trade in the short term I anticipate.

A good day for the RebelTrader portfolio. This morning I entered a new swing trade on NightHawk Radiology (NHWK) at $19.40 (1/2 position to start with). NHWK continued upward throughout the day and closed the day up 7.4% ( up 3.9% from my entry point). I had NHWK on my watch list since Tuesday and today it performed very well and met my buy point. I will monitor NHWK for the next entry point for the remaining 1/2. With the big gain today I expect to see some pullback on profit taking but I don’t see that lasting too long before it continues up again.

Today I sold NetGear (NTGR) because I saw what was starting to look like it was topping out. That means that there just was not enough buyers left to out number the sellers and that we were going to end the day with a doji (doji: The name given to a chart pattern which signals indecision). With that trading pattern developing I decided to take the gains and close the trade. NTGR provided a 5.1% gain in 10 days. Remember that it is not important to squeeze every penny out of a trade, what is important is that you have more winners than you do losers. Don’t focus on how big the gain is, instead focus on keeping the losses small. The gains will add up.. Every gain is a winner!

SanDisk (SNDK) released good numbers and investors were happy as in after hours the trading was up 6.5%. This will help the PC hardware sector, and may even rub off a little on my Western Digital (WDC) trade..