Trades of the Week (February 1 – 3, 2006)

Here are some of the more interesting trades I took this week. It was one of my better weeks as far as winning percentage (67% — 8 winners out of 12 trades) and expectancy (0.88). Maybe I should only trade 3 days per week every week. Hmm…

I went long in WITS on Wednesday morning. It was up strongly early thanks to its earnings report the night before. Once it triggered an NR7 alert on my Trade-Ideas scanner I took a look at the chart and loved what I saw. It had pulled back from the highs and was trying to bounce off of 22. (Those round-numbers often act as support/resistance.) So I just set my alert and waited for it to trade above that NR7 candle. This trade turned out to be a 2.53R winner.

SEPR was on my screen from the day before when it had a big move. I got shaken out of SEPR for a 1.22R loss as the mid-day market weakness dragged SEPR down. This one would have been a nice winner later in the day. Oh well…

I saw a note about RIMM on Briefing.com at 11:11. It was already in motion on the ‘news’, which was unconfirmed at the time. I saw a decent spot to jump in with about 75 cents of risk. This one turned out to be a 3.16R winner.

On Thursday I tried a trade in MRVL based off of a swing trade setup. My alert triggered right at the open as it took out Wednesday’s high. In my haste to get long I really miscalculated the distance to my stop and therefore bought too many shares. I realized this almost immediately while entering my stop loss. I thought about just closing it out but since it was still hanging tough and it never dropped under a 1R loss I held on. Once it shot above 69 I decided not to press my luck and I got out just in time for the (always on time) 10:00 reversal. I was thrilled to escape with a 0.85R gain.

As the market weakened on Thursday I started looking for shorts. AAPL, which is always on my screen, appeared to be setting up for a break of support. I jumped in once it broke $74. This was a 2.85R winner.

And finally, here’s a short of GOOG that I took Friday morning. I usually don’t trade at the open but given the way GOOG closed on Thursday (plunging under $400) and the WSJ article about their earning miss that was out Friday, I decided I’d better jump in quick. (I can’t believe that nobody was talking about that article on Friday!) I was watching support levels on the daily chart and decided to bail once it bounced back over $375, thinking that the support there would hold for the rest of the day. This turned out to be my big winner for the week with a 4.43R gain.

After I covered GOOG, I decided to push my stops on my other 2 shorts, AAPL and FOSL, to just over break-even. Those stops got hit pretty quick and I decided to call it a week. I figured I should end the week on a high note and didn’t want to risk doing something stupid. Plus I’m always mindful of the payout/payback cycle.