The broader market traded mostly sideways for a second day, ending slightly down, but there are plenty of attractive setups to keep on the watchlist at the moment, with CPE providing an example of one that, with a little patience, can be very rewarding.
Per prior posts this month, I'd been holding CPE for longer than I'd originally planned and it was starting to become a real pain in the backside, threatening to break out but then falling back to support on several occasions. Prior to today, I'd had sell limit orders set for the 4.00 mark (break even) almost every day just so I could take my money elsewhere, but the chart became even more attractive yesterday and today's news of an upgrade provided lift-off.
I thought I'd done well by selling at 4.25 from my 3.98 entry, but the stock rallied hard to close in the 4.60s, above two converging moving average lines, suggesting that there me be more upside as it continues its recovery from a steep fall earlier this year. I may keep it on the watchlist but must be satisfied with my modest gains.
Elsewhere, my hopes of seeing a further spike for HDY diminished in the pre-market and it actually dipped as ow as 2.23 before rallying back to close strong at 2.43. The stock remains oversold, but consolidation at this level for while would set HDY up for its next leg up.
ALXA threatened to blow a big hole in my FDA run-up strategy when news came out after the close that the company was selling 376K in shares on behalf of a major shareholder —it turns out that Hercules Technology Growth Capital are dumping their holdings at 3.30 after riding them up from 2.69... as BioRunUp.com muses, they've played their own run-up and are cashing in before the FDA makes their decision.
The stock dipped under 3.00 after hours but recovered a little to the 3.10 area. It would be interesting to watch the action at the open tomorrow but I won't be at my trading desk as I'll be taking the pup to the vet to have the family jewels removed (poor pooch!) but I expect there will be a little more juice left in the run-up before October 11.
Wednesday, September 29, 2010
Tuesday, September 28, 2010
Seeing Green
Seeing more red than green on my trading screen is nothing new as my portfolio has been weighed down by losing stocks all year, but in addition to Las Vegas Sands (LVS), my position in which passed 1000% in unrealized gains this week, some recent trades have been working nicely for me, adding some nice healthy green to my board.
Hyperdamics Corp (HDY) broke out from a long period of consolidation under 1.20 but hit solid resistance at 1.98 last week, before breaking out again today to a high of 2.50 in the after hours session. The rising wedge pattern it formed below 2.00 made it clear that even though the stock was oversold by the RSI and Stochastics indicators, HDY was determined to cut loose again and I doubled my position as it broke through to 2.00 range.
Seeing as it closed near the high of the day today, there will hopefully be some follow through at the open tomorrow which will allow me to set a stop to lock in these latest gains.
Elsewhere, my three bio run-up plays (see my fellow MSB-er, Mark's BioRunUp.com site for the skinny on what can be a very profitable trading strategy) for October are all working as planned, though there was a curious divergence between the two stocks expecting PDUFA decisions on October 11th.
We're obviously within two weeks of 10/11 now, the time when these run-ups often have their final leg up in anticipation of the FDA's decision, but while JAZZ headed north in healthy fashion towards $11, Alexa Pharmaceuticals (ALXA) headed down and bounced off support at 3.20, a buying opportunity in hindsight.
I was expecting JAZZ to be the unpredictable one seeing as the FDA's panel recommended against JAZZ's fybromyalgia drug in emphatic fashion last month, but I expect both to rise more into next week at which point I'll be looking to take most, if not all, of my positions off the table.
AVNR is my third bio play, with their FDA decision due at the end of October. That stock's run-up started in earnest last week and paused today around the 3.40 level. I'm sitting on 10% (AVNR), 26% (ALXA) and 78% (JAZZ) gains so far on those three plays.
In terms of my other swing trades, $BGP's chart remains bullish but it's a trade I should have got out of with a stop just below my 1.29 buy-in last week; $CPE stubbornly remains under 4.00; $HAUP is basing again in the 2.60 - 2.70 range (again, patience is the watchword there), and I was stopped out of $APTG literally on the bottom tick of the day at 13.14.
Hyperdamics Corp (HDY) broke out from a long period of consolidation under 1.20 but hit solid resistance at 1.98 last week, before breaking out again today to a high of 2.50 in the after hours session. The rising wedge pattern it formed below 2.00 made it clear that even though the stock was oversold by the RSI and Stochastics indicators, HDY was determined to cut loose again and I doubled my position as it broke through to 2.00 range.
Seeing as it closed near the high of the day today, there will hopefully be some follow through at the open tomorrow which will allow me to set a stop to lock in these latest gains.
Elsewhere, my three bio run-up plays (see my fellow MSB-er, Mark's BioRunUp.com site for the skinny on what can be a very profitable trading strategy) for October are all working as planned, though there was a curious divergence between the two stocks expecting PDUFA decisions on October 11th.
We're obviously within two weeks of 10/11 now, the time when these run-ups often have their final leg up in anticipation of the FDA's decision, but while JAZZ headed north in healthy fashion towards $11, Alexa Pharmaceuticals (ALXA) headed down and bounced off support at 3.20, a buying opportunity in hindsight.
I was expecting JAZZ to be the unpredictable one seeing as the FDA's panel recommended against JAZZ's fybromyalgia drug in emphatic fashion last month, but I expect both to rise more into next week at which point I'll be looking to take most, if not all, of my positions off the table.
AVNR is my third bio play, with their FDA decision due at the end of October. That stock's run-up started in earnest last week and paused today around the 3.40 level. I'm sitting on 10% (AVNR), 26% (ALXA) and 78% (JAZZ) gains so far on those three plays.
In terms of my other swing trades, $BGP's chart remains bullish but it's a trade I should have got out of with a stop just below my 1.29 buy-in last week; $CPE stubbornly remains under 4.00; $HAUP is basing again in the 2.60 - 2.70 range (again, patience is the watchword there), and I was stopped out of $APTG literally on the bottom tick of the day at 13.14.
Friday, September 24, 2010
What Was That About Patience?
I found out again this week that balancing patience with the need to book profits when they're on the table can be more than a little frustrating!
"Hogs get slaughtered", goes the old adage but I've been passing up gains that aren't even pig-sized on a few of my swing trades recently trying to reach my trading targets as the stocks have popped small but then given back the gains in fairly short order.
Netlist (NLST), Hauppauge Digitial (HAUP) and Callon Pete (CPE) are all cases in point but NLST in particular has been failing at 3.20 and then dropping back under 3.00. Unfortunately, I was away from my screen for much of yesterday so couldn't adjust my sell limit order down from 3.20 when the stock reached an intraday high of 3.19. When I did get back behind my computer, NLST was bleeding away towards 3.00 again so I sold at 3.01 thinking it was head back into the 2.90s where I could re-buy...
...only for it to gap up and run without me all the way to 3.25 this morning! I'd held the stock since last month in anticipation of just such and run and then been left standing on the platform when the train left the station!
The good news, of course, is that NLST usually comes back down and it closed around 3.08. With the bottom of the current rising trend line sitting around 2.90, I hope to add to the "scaling in" shares I bought at 3.17 today as the stock took a breather before deciding which way it was headed.
I was able to re-buy half my position in HDY at 1.90 yesterday, though, and with the stock looking over-bought at these levels, it might be hard for it to crack 2.00 on this go around, offering hope that I can purchase the other half in the 1.70s before any next leg up.
Next week, the October FDA plays — $JAZZ, $HGSI and $ALXA, in particular, as they all have PDUFA dates in the first 11 days of the month — should come into sharp focus. Having ridden $HGSI from $3 but sold prematurely at $12 last year, I've been out of that stock, but hold shares in $JAZZ, $ALXA and $AVNR which has now started it's FDA run-up in earnest, finishing today at the high of 3.22 and tacking on more gains in after hours trading the past two days. More on those to come.
In terms of my unsuccessful attempts at day-trading, I took a small 2% loss on Fuel Cell (FCEL) today after the stock failed to take the next leg up after an early breakout, and held shares of GenVec (GNVC) after buying at 0.61 and that stock too also stopped short of breaking out.
The short-term chart on GNVC looks promising, though, and it's a stock that can move when it wants to, as the last three sessions show.
"Hogs get slaughtered", goes the old adage but I've been passing up gains that aren't even pig-sized on a few of my swing trades recently trying to reach my trading targets as the stocks have popped small but then given back the gains in fairly short order.
Netlist (NLST), Hauppauge Digitial (HAUP) and Callon Pete (CPE) are all cases in point but NLST in particular has been failing at 3.20 and then dropping back under 3.00. Unfortunately, I was away from my screen for much of yesterday so couldn't adjust my sell limit order down from 3.20 when the stock reached an intraday high of 3.19. When I did get back behind my computer, NLST was bleeding away towards 3.00 again so I sold at 3.01 thinking it was head back into the 2.90s where I could re-buy...
...only for it to gap up and run without me all the way to 3.25 this morning! I'd held the stock since last month in anticipation of just such and run and then been left standing on the platform when the train left the station!
The good news, of course, is that NLST usually comes back down and it closed around 3.08. With the bottom of the current rising trend line sitting around 2.90, I hope to add to the "scaling in" shares I bought at 3.17 today as the stock took a breather before deciding which way it was headed.
I was able to re-buy half my position in HDY at 1.90 yesterday, though, and with the stock looking over-bought at these levels, it might be hard for it to crack 2.00 on this go around, offering hope that I can purchase the other half in the 1.70s before any next leg up.
Next week, the October FDA plays — $JAZZ, $HGSI and $ALXA, in particular, as they all have PDUFA dates in the first 11 days of the month — should come into sharp focus. Having ridden $HGSI from $3 but sold prematurely at $12 last year, I've been out of that stock, but hold shares in $JAZZ, $ALXA and $AVNR which has now started it's FDA run-up in earnest, finishing today at the high of 3.22 and tacking on more gains in after hours trading the past two days. More on those to come.
In terms of my unsuccessful attempts at day-trading, I took a small 2% loss on Fuel Cell (FCEL) today after the stock failed to take the next leg up after an early breakout, and held shares of GenVec (GNVC) after buying at 0.61 and that stock too also stopped short of breaking out.
The short-term chart on GNVC looks promising, though, and it's a stock that can move when it wants to, as the last three sessions show.
Wednesday, September 22, 2010
The Virtue of Patience
A new trading week, the S&P smashing through 1,130 resistance and the Bulls seemingly in control for now offered hope that I could book some profits this week on the swing trades I've had in the works this month... but, no. It seems more patience will be required.
HAUP seems intent on testing the 50dma around 2.48 before too long, while CPE showed brief signs yesterday that it was about to break out but it failed at 4.02 (coincidentally enough the price I've been placing sell orders the last few sessions but pulled it off when the stock start showing intraday strength and potential to start a move towards its 200dma at 4.49) before sinking back to support in the 3.70s.
NLST is the only one of the three that has stayed green this week with a modest move off support to the 2.90 area and that came, ironically enough, when the market was red today.
So no real progress in realizing some gains there but I did get caught trying to capitalize on some of the bizarre volatility in HDY in the final hour of trading as it zinged back and forth between 1.70 and 1.90 in a 10-minute spell. Of course, once I had a sell order in place for 1.90 and it fired, the stock blew past that level and closed a penny off the high at 1.97.
That level just under 2.00 has been formidable resistance for HDY in the past and I'm hoping it rebounds down a bit so I can re-buy my position, hopefully back in the 1.70s!
On the Operation Salvage front, a GTC limit order of mine triggered yesterday at 0.034 on penny turd JEDM, getting me out of a trade I should never have let turn red in the first place with about 40% of my initial investment intact — a couple of hundred bucks more than I would have escaped with last week so I'll take it, especially as the stock has sunk back to 0.024 today.
With a bit more breathing room, I've been upping my efforts to generate some day-trading profits but have found it frustratingly difficult, timing my entries too late and catching stocks as their momentum dies. I was stopped out of LOCM (though I knew going in that the upside was limited as I was jumping on at the tail end of a big move), sold ACAS at break even after it hit a wall of resistance and BGP had moved just a penny by the close today, ending the day at 1.27 (0.02 below my entry) so that's become a new short-term swing trade for me. The chart looks promising for more gains, though, hopefully tomorrow.
On a positive note — and strike another one for patience! — LVS made another 52-week high with a nice point-plus move on a red day for the broader market, bringing me to within touching distance of a 1,000% gain on what is unquestionably my favorite stock!
HAUP seems intent on testing the 50dma around 2.48 before too long, while CPE showed brief signs yesterday that it was about to break out but it failed at 4.02 (coincidentally enough the price I've been placing sell orders the last few sessions but pulled it off when the stock start showing intraday strength and potential to start a move towards its 200dma at 4.49) before sinking back to support in the 3.70s.
NLST is the only one of the three that has stayed green this week with a modest move off support to the 2.90 area and that came, ironically enough, when the market was red today.
So no real progress in realizing some gains there but I did get caught trying to capitalize on some of the bizarre volatility in HDY in the final hour of trading as it zinged back and forth between 1.70 and 1.90 in a 10-minute spell. Of course, once I had a sell order in place for 1.90 and it fired, the stock blew past that level and closed a penny off the high at 1.97.
That level just under 2.00 has been formidable resistance for HDY in the past and I'm hoping it rebounds down a bit so I can re-buy my position, hopefully back in the 1.70s!
On the Operation Salvage front, a GTC limit order of mine triggered yesterday at 0.034 on penny turd JEDM, getting me out of a trade I should never have let turn red in the first place with about 40% of my initial investment intact — a couple of hundred bucks more than I would have escaped with last week so I'll take it, especially as the stock has sunk back to 0.024 today.
With a bit more breathing room, I've been upping my efforts to generate some day-trading profits but have found it frustratingly difficult, timing my entries too late and catching stocks as their momentum dies. I was stopped out of LOCM (though I knew going in that the upside was limited as I was jumping on at the tail end of a big move), sold ACAS at break even after it hit a wall of resistance and BGP had moved just a penny by the close today, ending the day at 1.27 (0.02 below my entry) so that's become a new short-term swing trade for me. The chart looks promising for more gains, though, hopefully tomorrow.
On a positive note — and strike another one for patience! — LVS made another 52-week high with a nice point-plus move on a red day for the broader market, bringing me to within touching distance of a 1,000% gain on what is unquestionably my favorite stock!
Friday, September 17, 2010
Operation Salvage 2010
The good news is that, as of the market close on September 17, my portfolio is out-performing the S&P500 by 20%, and that's in spite of the smattering of large red blemishes I alluded to in a previous post.
The not-so-good news is that because of those poor trading decisions made earlier in the year, I'm $200 in the red for the year in terms of realized Gains and Losses as I continue with Operation Salvage — my attempt to jettison my no-hoper stocks (at the very least the OTC/BB ones) and still end 2010 flat or with profit.
The plan is a two-tier one, concerning on the one hand those stocks where I am in the hole to the tune of a minimum of $500 but have some hope of either trading my way out or actually getting back to even through the company's own performance — e.g. Acadia Pharmaceuticals (ACAD), TriValley Corporation (TIV), Helicos (HLCS), Sunesis Pharma (SNSS) — and, on the other hand, those stocks where I don't anticipate ever getting my money back — e.g. Anthracite Capital (ACPIP) or the four dead-end OTC/BB stocks I hold. Priority is obviously being given to the latter category of stocks which I will probably keep in case, by some chance, they get pumped at some point in the future and I can make some money back.
Since that prior post, I've taken advantage of a pop in one more penny stock to offload my holdings there, taking my tally to three. Providing I play the FDA run-ups right, I have potential gains from JAZZ and ALXA that would offset another two of my losers, leaving me in a decent position to complete phase I of my 2010 mission by year's end.
With a bit of luck, in some of the swing-trading positions I'm currently working, I might be able to hit that target even earlier and start working on phase II as well. That is requiring some patience, however, with none of NLST, CPE, HAUP, FSII and now CIGX, a swing position I opened today, moving how I want them to yet. All have plenty of upside potential and a history of moving nicely, though, and I'll be looking to capitalize on any pops to book profits as they come.
HAUP (Bought at $3.04)
NLST (Bought at $2.79). The medium-term case for NLST is bullish, provided it holds that ascending trend line and completes the big wedge that's been forming over the last few months. If I have a concern, it's that the stock has been grinding along the moving averages and giving back gains on short-lived pops at a time when the broader market has been performing fairly well and testing overhead resistance.
If the market fails to push through 1130 on the S&P500 and heads to the bottom of the trading range established over the summer, it'll be interesting to see if NLST hangs steady above 2.65-ish and that rising support line. If it can, it sets up for a bullish break above 3.60 towards the end of the year.
Penny pick hall of shame
It should be noted that I have made money from penny stock pumps but, criminally, left plenty on the table and allowed myself to get stuck in some deep holes.
How? Well, it's a case of "this is a dip and the stock will recover soon," or "the pump isn't over, there's bound to be another pop," or "technically, this is due for a turnaround"... the usual story, only in OTC/BB land, there often aren't any recoveries. Stocks are manipulated by market makers, driven down by shorts, and bloated by dilution by the companies themselves.
A couple of the plays in which I've ended up deep in the red were bought on big intraday pullbacks, others at the time of the alert, but dilution and/or aggressive shorting took hold and there was no recovery... just a gradual decline and increasing paper losses.
Here, then, are the losers I've dumped so far and those that I still have to get rid of:
The not-so-good news is that because of those poor trading decisions made earlier in the year, I'm $200 in the red for the year in terms of realized Gains and Losses as I continue with Operation Salvage — my attempt to jettison my no-hoper stocks (at the very least the OTC/BB ones) and still end 2010 flat or with profit.
The plan is a two-tier one, concerning on the one hand those stocks where I am in the hole to the tune of a minimum of $500 but have some hope of either trading my way out or actually getting back to even through the company's own performance — e.g. Acadia Pharmaceuticals (ACAD), TriValley Corporation (TIV), Helicos (HLCS), Sunesis Pharma (SNSS) — and, on the other hand, those stocks where I don't anticipate ever getting my money back — e.g. Anthracite Capital (ACPIP) or the four dead-end OTC/BB stocks I hold. Priority is obviously being given to the latter category of stocks which I will probably keep in case, by some chance, they get pumped at some point in the future and I can make some money back.
Since that prior post, I've taken advantage of a pop in one more penny stock to offload my holdings there, taking my tally to three. Providing I play the FDA run-ups right, I have potential gains from JAZZ and ALXA that would offset another two of my losers, leaving me in a decent position to complete phase I of my 2010 mission by year's end.
With a bit of luck, in some of the swing-trading positions I'm currently working, I might be able to hit that target even earlier and start working on phase II as well. That is requiring some patience, however, with none of NLST, CPE, HAUP, FSII and now CIGX, a swing position I opened today, moving how I want them to yet. All have plenty of upside potential and a history of moving nicely, though, and I'll be looking to capitalize on any pops to book profits as they come.
HAUP (Bought at $3.04)
NLST (Bought at $2.79). The medium-term case for NLST is bullish, provided it holds that ascending trend line and completes the big wedge that's been forming over the last few months. If I have a concern, it's that the stock has been grinding along the moving averages and giving back gains on short-lived pops at a time when the broader market has been performing fairly well and testing overhead resistance.
If the market fails to push through 1130 on the S&P500 and heads to the bottom of the trading range established over the summer, it'll be interesting to see if NLST hangs steady above 2.65-ish and that rising support line. If it can, it sets up for a bullish break above 3.60 towards the end of the year.
Penny pick hall of shame
It should be noted that I have made money from penny stock pumps but, criminally, left plenty on the table and allowed myself to get stuck in some deep holes.
How? Well, it's a case of "this is a dip and the stock will recover soon," or "the pump isn't over, there's bound to be another pop," or "technically, this is due for a turnaround"... the usual story, only in OTC/BB land, there often aren't any recoveries. Stocks are manipulated by market makers, driven down by shorts, and bloated by dilution by the companies themselves.
A couple of the plays in which I've ended up deep in the red were bought on big intraday pullbacks, others at the time of the alert, but dilution and/or aggressive shorting took hold and there was no recovery... just a gradual decline and increasing paper losses.
Here, then, are the losers I've dumped so far and those that I still have to get rid of:
Stocks dumped:
BROE - $305
SGDH - $701
Total $1,006, off-set by gains in JAZZ, August 2010
AGRT - $630
JEDM - $780
Total $1410, partially off-set by $100 gains in CIGX, September 2010
Still holding:
AVVH - $650
BEDA - $910
FWTC - $857
ENTI - $576
Total 2,993 - ouch!
ENTI - $576
Total 2,993 - ouch!
Thursday, September 16, 2010
Luck and the Quick Buck
Post from 9/8/10, moved from Tumblr
Ah... the world of penny stocks. The promises of multi-baggers and making thousands off just one trade suck you in before the reality of newsletter pumps, nefarious Market Maker tactics, dilution, scams and misleading "news" hit home and the novice trader finds his or herself staring at some ever-deepening holes in their portfolio.
I approached trading and the market with a high degree of caution when I dipped in my toe in March 2009 — yes, by serendipity, one day after the market bottomed — and I didn't really try my hand at the OTC/Pinksheets market for quite a few months into my trading "career" once I had some cash under my belt.
When I did, I was fortunate enough to make some small gains but in general I was either too timid to enter or my timing was off when I did. The gloss came off a succession of penny stock newsletters until I started tracking the success of a paid stock-picking service on the advice of a friend.
The cost of membership was small so I took the plunge and was soon getting daily recommendations of (mostly) penny stocks. I was amazed at my propensity to pick the wrong stocks, missing the big winners and getting stuck with the ones that immediately tanked through dilution or aggressive shorting.
Before I knew it, I was down thousands of dollars more than the cost of signing up for the service in the first place and had maxed out my trading cash. Forced into a period of reflection on my errors, I emerged from the experience having learned some important lessons — not least the reasons why so many experienced traders I know online were adamant that they never played penny stocks at all — chief among them to take profits when they're on the table and cut losses quickly.
That sounds blindingly obvious and they're the number one rules for day and swing traders -- absolutely crucial for penny stocks — but, as so many find, they're much harder to put into practice than you ever expect. After thousands left on the table and some frustrating paper losses, I'm a much smarter and more seasoned trader. Technicals and charts are unreliable for OTC/BB stocks because there are so many other factors working against you. Blind faith that stocks on those markets will come back because they've popped big before will not work in so many cases. It's quite something to watch a $1,000 investment dwindle by 80% in a few weeks.
Armed with that experience, I set myself a target of erasing the paper losses I'd accumulated in early 2010 by the end of the year: the plan, basically, is to start 2011 with the same amount of trading cash with which I began 2010. That means using the charting knowledge and technical analysis I've built to date, trading to a plan and either selling or mentally writing off each crappy stock, one by one.
So far, I'm 2 for 6, with paper gains potentially accounting for 2 more and if I'm successful in erasing all of those, I'll move on to four other positions from 2009 that are also horrible red blights on my portfolio!
Currently working...
Post from 9/8/10, moved from Tumblr
Though the market is at the upper end of its current trading range between 1040 and 1100 and change on the S&P, I'm hoping that three swing trades that I have on the go will reap benefits in the next couple of weeks.
All three of $CPE, $HAUP and $NLST (correction, $CPE does not, though it looks ripe for an imminent rebound) look like they're under accumulation right now and primed to break out if the broader market cooperates. All three have threatened to do so over the last two or three sessions and failed at points of resistance. Fingers crossed at least one of them rips before any downturn in the broader market.
Though the market is at the upper end of its current trading range between 1040 and 1100 and change on the S&P, I'm hoping that three swing trades that I have on the go will reap benefits in the next couple of weeks.
All three of $CPE, $HAUP and $NLST (correction, $CPE does not, though it looks ripe for an imminent rebound) look like they're under accumulation right now and primed to break out if the broader market cooperates. All three have threatened to do so over the last two or three sessions and failed at points of resistance. Fingers crossed at least one of them rips before any downturn in the broader market.
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