This was the day of the sympathy plays for me as I caught some nice moves in GameStop Corp. (GME) and Infosys Technologies (INFY). Each of those stocks was up in sympathy with another stock that reported good earnings today / last night, Electronic Arts Inc. (ERTS) and Cognizant Technology Solutions Corp (CTSH), respectively. That’s a switch for me because I usually try to focus on the actual stocks that had the news. I’ll have to change my typical modus operandi and track the sympathy plays. I finished the day with just over 6R (4%) of gains and those two accounted for 7.15R.
Despite the good day I’m frustrated because I should have made about double what I actually made. The first problem was that I missed an entry in Alcan (AL) right at 10:30 because my motherf$#%^&@!!! cable modem disconnected right at 10:29. (Thanks Comcast! Interesting that Kirk, in Minnesota and Ugly in Philly have the same complaints about Comcast. In fairness, they’ve gotten a lot better here since my whining from years ago.)
AL was on the list of gappers this morning. I simply waited for it to print a narrow canlde which I could get long above. It completed a 30 min. candle that was only 27 cents tall at 10:30. It traded above that candle while my internet conenction was down and by the time I got reconnected, only about 3 minutes, it was off to the races without me. That could have been a 6R trade if I held to the close and didn’t take any partial profits. More likely I would have gotten about 4R including a partial profit on the way up. Here’s the chart:
So that was the one that got away. Luckily I got my modem reconnected just in time to catch GME as it triggered. I first noticed GME on my gappers scan in CyberTrader. I knew ERTS was “in play” because of their earnings so I made sure to keep an eye on GME as a sympathy play. Classic dummy play here, long above the narrow 10:00 inside bar with a stop below for 21 cents of risk given my entry at 41.66. I took some partial profits on the way up and ended up making 4.35R on GME.
Next up was VPHM which turned out to be a dud with only a 0.47R gain. Again, I got long above the 10:00 candle (that little red inverted hammer). I took a partial at 9.20 when I saw a bearish note on Briefing.com and moved my stop to breakeven on the remaining shares just over breakeven.
INFY triggered next. Once again I got long above the 10:00 candle and took partial profits on the way up. This one ended up giving me 2.8R.
Here’s where the fun began. I jumped in ALVR as it raced above the 10:30 and 11:00 candles. I mistakenly bought twice the number of shares that I should have and by the time I noticed the stock was down a few cents from my entry price. I had to bite the bullet and dump those extra shares. After I did that I (foolishly) decided to move my stop up 1 cent from where it was, at 6.35, the low of both the 11:00 and 11:30 bars. I did that b/c there were a lot of buy orders at 6.35 and I just wanted to make sure that I wouldn’t get hit with a lot of slippage since I already took a hit on those extra shares. Of course the stock traded right to 6.36, took me out and reversed on a dime. There was potential for another 2 to 3R or so. Combine that with the 1.4R loss I took on it and there’s another missed 3 to 4 R on the day.
Lesson learned, I’ve got to be more careful with my lot sizes. I seem to do this once a month in one form or another. (What’s that Ugly writes every day about having it within me to damage my account?)
My final trade was STJ, which resulted in a 0.05R loss. STJ was another gapper, which was up on some Medicare and Medicaid news or some such (whatever!)… I got long above that 11:30 hammer & moved my stop to break-even once it reversed under 39.
So there you have it. A good day but it could have easily been much better.