Blessed is the man who trusts in the Lord and whose hope is the Lord

Morgan Stanley: Time to Short Again?

September 28, 2011 by Leave a Comment

morgan stanley 27 Sep 2011

On 22 Sep, Morgan Stanley formed a hammer. What made it significant is that it gapped down from the prior day. Market had a massive sell-off after Fed chief, Ben Bernanke announced “Operation Twist”. Market already expected it and there were no more unexpected good news. So, a typical buy on rumors sell on news.

Normally, there will be a reversal after heavy selling. The hammer candlestick gave me the first hint and it was also located at the lower channel support. I waited for the confirmation the next trading day. The next day was a bullish white candle. I went in at $13.73 (long position)

After 3 days of rally, yesterday it formed a bearish shooting star. Price stalled at the channel’s resistance and closed below the 20-day moving average also. I covered my position at $15.16 yesterday.

Stochastic is not showing overbought. But do you notice that the previous 2 times when it was hitting near the channel resistance, the stochastics readings were also halfway up only, price still went down.

So after going long and covered my position yesterday, I go short. Will Morgan Stanley goes down the next few days? We shall wait and see.

Be Sociable, Share!
Filed Under: Trading Tagged With:

I Didn’t Sell My Silver. I Bought More Instead

September 27, 2011 by 4 Comments

I had my fair share of emotions (fear) when I realized that silver has dropped to $27 for a period of time. I was thinking whether the bull run has indeed ended. My thoughts: “Should I really sell this time? Will it drop to $20??”

I told myself to calm down. The worst time to sell is when everybody panicked and sell. I just felt that the drop in price was really too fast. Too fast too furious and it looked manipulative in my opinion.

In the end, I just hold on to it and didn’t sell.

A lot of investors are using moving average as a guide to sell and the invisible hands know it. If the invisible hands really want to manipulate, they need to push the price down very dramatically in order to “force” everybody to sell (just my own personal theory). So when the price cut below 200-day MA, hell breaks loose. Everybody wanted to sell and get rid of their silver holdings NOW.

Take a look at the DAILY chart below. Silver has formed a hammer candlestick and it has a very LONG lower shadow. The sellers capitulated and sell at the lowest. The bulls then came back in to buy again at the end of the day. Weekly chart also showed the same thing, with a very long hammer. Normally a hammer will follow by a reversal.

silver daily chart 26 Sep 2001

If you take a look at a longer time frame – MONTHLY chart, you can see that silver actually is still in a long term up-trend. The support line is drawn in blue by me.

silver monthly chart 26 Sep 2011

The support is at about $28. The last red bearish candle still close above the support. So I guess the bottom should be around $27-28 (if the uptrend is still intact) and the price will reverse soon in that case.

Then later during the night, I was checking out silver price using the CMC platform. I was looking at the intra-day (30 min) chart below:
cmc markets silver intraday chart 26 Sep 2011

Big red candle means the last wave of sellers. Then follow by a big green candle “piercing up”. This is call a piercing pattern candlestick pattern. It shows that selling has stopped and people are coming in to buy again.

Then for a period of time, silver price was in a consolidation phase, moving up and down between $28-$29. After which the price broke past the resistance. I monitored a bit longer to make sure it wasn’t a false breakout. After confirming…. I went in to buy at about $30.

Isn’t it a good time to buy when silver price dropped from $40 to $30? It’s cheap! I bought when people are scared to buy.

At point of writing, the price is at about $30.80.

Of course, my analysis and judgement might be wrong and silver can drop back to $27 or even lower today or tomorrow.

To make sure I can get in and get out fast, this time round I am using CMC to make the silver purchase. Staying nimble and cut loss if silver dived again.

I am just sharing my analysis on how I am using TA to make a judgement and a decision to enter into a position.

I can be wrong so please don’t follow whatever I said. Make your own independent judgement.

It all boils down to the same thing again: “IF I AM WRONG, WILL I BE ALRIGHT?”

I know I can stomach the risk…and I am always prepared to be wrong (so that I don’t lose my underwear too!)

All of us bought silver at different price, have different profit target, have different risk-appetite. You know yourself best!

I think this episode is an extremely good experience to thoroughly understand the way you feel and how you react to your EMOTIONS.

A never ending learning journey for our investing path ahead! Wink

Be Sociable, Share!
Filed Under: Investing Tagged With:

Candlestick Analysis: Tesoro Petroleum

September 24, 2011 by Leave a Comment

tesoro petroleum morning star

The chart above is Tesoro (TSO) at the end of trading day on 23 Sep 2011 (Fri).

The market had a massive sell-off for the past 2 days. Tesoro had a big gap down as seen from chart. On Friday, it formed a southern Doji. After a big bearish red candle, and then a doji… Looks interesting to me. It has the potential to form a Morning Star formation.

I think the market has over-reacted and oversold. It is oversold at least for this counter, as confirmed by stochastics. Definitely will have a reversal. Whether it is short term or long term, I don’t know. I will let the market tell me. I might enter a position if the opening price for Tesoro is higher than the previous close.

Resistance will be at about $21.50 which occurs at the gap (some call it a window), shown by the horizontal blue line in the chart.

I am going against the trend if I go long. But after the massive sell-off, I think the chance of a reversal is very high. Shall stay nimble as see how it goes.

Well, this is just my personal views, don’t follow and believe whatever I said. Please practice independent analysis and judgement. I might be wrong too!

Be Sociable, Share!
Filed Under: Trading Tagged With: , ,

Potential Shorting Opportunity: Texas Instruments

September 20, 2011 by Leave a Comment

shorting selling Texas Instruments

The bearish reversal pattern from Texas Instruments (TXN) shown on the chart above is a Tri Star Doji. I have came across such pattern in candlestick textbook, but this is the first time I have seen one in “real life”. This pattern is quite rare. When a Doji is formed, basically it is telling us that there is an indecision. So, 3-days of Dojis simply illustrates more indecision.

It is very clear from the chart that the 50-day MA is acting as a resistance. The 2nd Doji CANNOT close above the 50-day MA. Stochastic is also in overbought region. The profit-taking target would be at about 2o-day MA. Volume is also getting lower during the past 4 days. This also shows that there are not enough buying demand to push the price higher.

Under normal circumstances, I would see this set-up as a high probability trade. But do take note that our dear Uncle Ben Bernanke will be opening his golden mouth in the FOMC meeting on 20-21 Sep. Most people are anticipating good news from him. So, IF he really deliver good news, the overall market will be in a bullish mode and price might rise. The reverse will happen if there is no measures to spur the economy. Personally, I won’t trade this counter now. I will just see what’s the outcome for the FOMC meeting first.

There’s a saying: There is a time to go long, a time to go short, and a time to go fishing. So, right now I will just stay out of the market for the time being.

Be Sociable, Share!
Filed Under: Trading Tagged With: , , , ,

Potential Shorting Opportunity – Yahoo

September 16, 2011 by Leave a Comment

yahoo shorting opportunity

Take a look at chart of Yahoo above. Can you see what I see?

Candlestick: Shooting Star
Channel: Closed below the resistance
Stochastic: Overbought
Moving Average: Very far away from the 20/50 day MA

Where do you think Yahoo will be moving next most likely? Up or down? You decide.

Be Sociable, Share!
Filed Under: Trading Tagged With: , , ,

Where to Outsource for Cheap

September 11, 2011 by Leave a Comment

If you want to get things done, but you face several issues such as:

  1. You don’t know how to do
  2. You don’t like to do
  3. You don’t want to waste time doing

Then you need to outsource. The place where you can simple things get done is: http://www.fiverr.com

Every project/task (they call it a gig) costs only US$5.00. It’s cheap.

There are so many things you can hire people to do things for you such as:

  • design logo, graphics, ebook cover
  • write press release, article
  • HTML, programming
  • video editing, professional voice-overs
  • technical support
  • boring repetitive tasks such as SEO (search engine optimization) work
  • bizarre task: ask people to sing you a song, draw a cartoon for you.
  • you name it, most likely you can find it….

Tips: There are thousands of providers out there, try to find somebody who has good ratings such as “top-rated seller” or with many positive reviews.

On the other hand, if you want to earn some part-time income or build your portfolio, you can also provide your service too if you have the expertise.

I use this service frequently, normally for tasks that I find is repetitive (SEO) or things that I can’t do such as graphic designs.

Be Sociable, Share!
Filed Under: Internet Marketing Tagged With: , ,

Don’t Go Against The Trend

September 10, 2011 by 2 Comments

Lesson learned: If the charts tell you that the overall market is down and the short selling potentials are much higher than going long, just focus on shorting. Don’t go against the trend, you are just taking unnecessary risk if you do that.

As seen from the screenshot above, I go long on 2 stocks. I THOUGHT with bullish reversal signals, they will go up. However, I am going against the trend. True enough, the Dow go south again and my stop loss for my 2 long positions were hit. Luckily my losses were covered by my short position in Reynolds American.

Do take note that I am not investing. I am just trading these stocks. So I don’t give a hoot about fundamentals. I just find counters with the right candlesticks signals which can give me a high probable trade – in this case shorting them. I normally hold my positions for a few days only – swing trading.

Be Sociable, Share!
Filed Under: Trading Tagged With: , , ,