When it comes to trading and investing, price is the ultimate indicator. Since it determines whether or make or lose money, you can make the case that its the only indicator that really matters.
One of the observations made by investing guru Jim Cramer of CNBC's Mad Money TV show is that once a stock makes it to $80, there's a good chance they will go to $120 before they split 2 for 1 and do it all over again. I had this rule in mind when I added to my position in pharmacy benefit manager SXCI Health Solutions last Monday 4/16 when the price was about $79.50. This price action was particularly telling since the broad market was actually down that day!
Anyway, the price action on Monday 4/16 was important since it took out the high of a "Bull Elephant Bar" put in back on 4/2/2012 which pushed the price solidly into the mid 70's. And that move took out the high of a prior bull elephant bar put in back on 3/9/2012. So the price action was showing higher prices ahead and that's all I need to know and to add to my position.
On Tuesday came the news that SXCI was taking over Catalyst Health Solutions for a cash and stock deal for a 30% premium to Catalyst's closing price. Usually in a takeover situation to acquiring company's shares go down due to dilution. In this case, the shares of both companies popped signaling that the market clearly viewed the consolidated company as a case where the whole is greater than the sum of the parts.
Anyway, my timing was good since it was all upside in the shares which touched $100.5 later in the week before pulling back. Clearly the stock made half of the 80 to 120 move in only 4 trading days! I look off the shares added on Monday for about $97 on Friday bringing in 18 points in a few short days! This move added about 1.5% to my portfolio on the week and added to my lead over the S&P 500.
Of course it doesn't always work out that way, but it shows there's a method to my madness. Of course its easy to point to past success since hindsight is 20/20 right? So who are the future winners according to my methods? Here are some potential 80-to-120 movers showing promise right now:
FDO - Discount Retailer Family Dollar
ICUI - Emergency Room equiment maker ICU Medical
YUM - Restaurant company YUM brands
I have some others, but these are the ones looking most promising right now, and I have open long positions in all three.
As for Automated Forex Trading, it was another miserable week with all of my accounts now clearly in the red for the year. We have some sizeable unrealized profits in the Atinalla No 3 and Atipaq Full Portfolio, but I don't beleive either of these moves will bring the accounts back into the black for the year.
Speaking of Forex, I have a very curious situation where my MyFxbook accounts are showing no open trades, yet my MetaTrader platforms show a number of open trades. At the same time, the MyFxbook page appears to be completely up to date. If I get that figured out, I will leave a comment later today.
Enjoy the rest of the weekend and coming week.
Hey thought I would drop in.
ReplyDeleteLooks like I don't see the system you created anymore? Did you take it private?
I am getting eaten alive by Atipaq this year. I am not sure what the deal is but I have nothing but losses for the past couple of weeks. I have lost almost all gains from the previous year. I am worried that the system is dependant on some sort of .dll update or fix of some sort. Don't get me wrong, I consider Daniel my mentor in Forex and such, but sometimes I wonder if he is complicating his EA's too much. I see a fix for this or a patch for that quite a bit. I worry my version of Atipaq has some sort of bug that was fixed after I left his site. Anyway, I know he does a good job. I hope things are still going well for your 5 year plan.
Take care
JT
Hi JT and thanks for the comment.
ReplyDeleteI removed Megadroid and Fx-Regression earlier this year due to non-performance. Both were down about 10% since starting. Both at one point were up 20% or more, but ended up giving it all back then some.
Atipaq has been a mess lately. After being up almost 95% earlier this year and since starting the account back in early 2011, its given back about 60% and is currently up about 30%. I don't think it has a bug, its just going through a period of non-performance which is to be expected.
To put it in perspective, any mechanical system that is up almost 100% in a 2-year period is bound to give back some profits. Based on when you started, you could be down. But it has a history of good performance, and I think its worth sticking with.
The ways its been going with Forex lately, i'm unlikely to double by investment from 20K to 40K as called for with my 5-year plan. I'm doing much better with equities and options where I can risk 1 or 2 grand and loose half, or double it within a 5 day period trading AAPL options.
So that's it, take care and hang in there,
Chris