$RIMM in Play

Coming into today Research in Motion(RIMM) was on my radar.  Some news had come out in the pre-market about the pricing of its tablet computer.  The news basically said that the tablet would be priced below $500 which would make it a cheaper alternative to the iPad.  The pre-market wasn’t showing much in the way of price action but I had RIMM on my watch list to see how it would react to this news. 

Immediately on the open RIMM showed some strength, basically trending higher for a $1.50.  The first level I was watching as potential resistance was 56.60 which was the highs from 11/08.  We broke this level in the first 15 minutes but this was where your skills as a trader must come in.  First of all the stock had just run for over a point so odds are pullback or sideways consolidation was to be expected.  Second the open in this market lately has been a chop zone with a lot of volatile sideways action.  For about 2 months now, in our morning meetings at Keystone, we have talked about the better opportunities presenting themselves after the open around 10-10:30am. 

After the open I knew I wanted to get involved in RIMM.  The market was showing weakness especially in the tech sector and RIMM was staying relatively strong.  It was only a matter of waiting for RIMM to consolidate and finding a good area to manage risk.  I entered during the hour-long consolidation pattern and added on to the trade when it broke the high of 56.81. 

As you can see for the rest of the day it was just a matter of how much you made on this trade.  Personally I missed about .70 in middle of this trade because I covered the entire position around the resistance at 58.00 instead of holding a piece.  I got back in on the next break out but left some money on the table.  Coming into tomorrow I am expecting RIMM to still be in play as this is usually a stock that trends for a few days after a news related break out.  The 200ma is at 59.50 but above that could see a trend into the 61-63 area.  Best of luck in your trading and have a great night. 

Kyle

FOCUS for stock trading

I think in the past few weeks that I’ve been at Keystone, the one  resounding theme has been “focus”.  You can go into the morning, fresh and prepared (having already set your game plan for the day) and then have it all thrown against you because you lost focus (for even 2 minutes) while in the game. 

I think the past few weeks have been extremely helpful in helping me to understand what to focus on while I’m trading.

FX has been a driving factor of the markets and focusing on the USD and the EUR moving  has been extremely helpful in reacting to moves.  Making sure to focus on currencies, and broader market indices (VIX, SPY, DOW, ETF’s, etc…) at all times, have allowed me to have a greater understanding on the way certain stocks move.

It’s not to say that things are always going to play out the way you “expect them to” (green on the screen) but you could definitely limit your downside over the long run making an effort to understand and focus in on all the moving parts while in the game. That’s what I learned at least…

Liberty Global Inc. (LBTYA, LBTYC)

LBTYA/LBTYC are two stocks for the same company, just different classes. They provide voice, video, and broadband Internet services. Some of its competitors are also seeing positive order flow coming in, such as CMCSA, DTV, VIA-B, TWC, and DISH. LBTYA is a 10+ long on the charts, 10 above the 20, above the 50, above the 200.

It has been rallying from a breakout starting September 1st, 2010 and has had only 8 days since that closed lower than the open, all of which never dipped below the previous 5-6 day range. Significant volume started coming in on October 15th and since then the lowest volume day was a down day on 2.2million shares traded, while the other days usually have a range of 3-4 million shares traded. Unfortunately the ATR for this stock is only 0.67 but the beta is 1.44. Today is unfolding very bullish, it could be an energy candle.

The hourly chart looks very orderly and easy to trade, it doesn’t pull back hard or gap around much. But again this stock does not move too far, usually about 40 to 50 cents a day. If you are looking to trade this sector, which is pretty bullish, this is definitely a stock to trade, either intraday or swing trade.

Breakout Trade $RIMM $$

Day after day we as traders are in search of opportunity.  I have many conversations with traders who complain at the end of the day that this market is void of good trades.  They complain that there is only 30 minutes to an hours worth of good trading a day.  The problem these traders are having is that they are not in the right stocks.  The majority of our time should be spent looking for stocks that are going to move plus be readable. 

Today was a perfect example of being in the right stock.  The market as a whole was flat and basically trendless on the day.  Even though this was the case I ended the day thinking it was an easy day.  Why? Because I was in the right stock. 

On the open today there was one stock on my radar, Research in Motion (RIMM).  The previous day RIMM traded very well, with volume, and closed strong.  I was watching the stock trade in the pre-market and right around 915-920 RIMM started to show some strength on the tape.  My game plan was to get long around the previous days high.  This entry triggered at 933 and I got long.  This was the definition of a breakout trade as I was booking half of my trade for a point within 6 minutes.  The reason I booked is the market lately has been retracing opening moves only to resume them later on in the day.  The correct way to trade this breakout was to book some of the trade in order to manage risk.  RIMM ended up pulling back a bit but was still exhibiting strength on the tape so I added back in around the 53 level.  As you can see from the chart this was a good idea as I got another point out of the trade before exiting most of the trade during the consolidation of the move around 1030-11.  I reentered the trade when volume picked up at the 55 level and the bid held after the break.  I got a quick .90 on this trade before I recognized exhaustion coming and exited.  The tape started to get erratic and I knew this was the time to get out as something was changing about the way RIMM was trading. 

The key to this trade was that I was ready for it.  I had a game plan and the plan executed.  Many traders spend their time complaining about moves they missed or trades they mismanaged.  The reason for this is that they don’t have a good plan about what they are going to do.  Spend your time developing trade scenarios and spend the market hours executing your plan.  Best of luck in your trading. 

Kyle

Trading a Sector $LVS $MGM $WYNN $$

Over the past few months the market has been basically directionless.  This lack of direction from the markets has made trading with conviction a little difficult.  Trading day in day out has been more of a stocks pickers market and has forced us as traders to focus on a bigger list of stocks.  The reason for this is because of news, and or volume, specific sectors may be in play on a certain day.  When these specific sectors are in play you can’t miss out on the opportunity because opportunities to make big money in this market have been limited. 

Yesterday we had a perfect example of a sector that was in play for the day, it happened to be the gaming sector.  Las Vegas Sands (LVS) has been on my list for a while now.  It is a readable stock that generally has good volume.  It has been on my list as a long because it has been holding the previous breakout above 32.70 and doesn’t have any resistance till around 39.  My plan going into the day was to watch for strength on the open and get involved above 35.90. 

This plan changed a bit on the open because of the relative strength on the open from the gaming sector.  I got involved on the first pause around 35.70 so that I could build a position above the breakout level.  Because of the relative strength compared to the market my probabilities for the trade went up so it was my responsibility to allocate more capital  to the trade. 

I ended up holding this trade for most of the move and captured most of the move with full position size.  These have been the types of opportunities that this market has been providing.  Find where the money is flowing into or out of each day.  Good luck today in your trading. 

Kyle