Home > Apprentice Trader Journals > Going long a weak stock in a strong sector

Going long a weak stock in a strong sector

Goldman Sach’s upgrade of South Western Energy ($SWN) pushed the energy sector up on Monday. On Friday I had been shorting Conoco Phillips ($COP,) but today I was looking to go long. It was by the far the weakest of the energy stocks I watch.
$XLE, $SLB and $HAL were all close to being up 2% and $CHK was up 4%. COP however was the laggard of the group and I anticipated that the rising tide in energy would lift all boats.

I first wanted to wait for COP to test and hold Friday lows at $50.81. On its second 15 minute candle it made it as low as $50.86. I then waited for the next 15 minute candle of buying to finish. It pushed up to $51.16 and then came back in.

I placed a bid at $50.99 and got filled passively on EDGX. My first profit target was the day’s high at $51.54 and the second target being the previous day high at $51.81. My out was a break of the previous day low, so I set my stop at $50.79. So it was just over a 2:1 risk/reward, which is not great but not bad for today’s market.

After some chopping around COP finally pushed to $51.17.  I was moving my stop up to the bottom of each completed 5 minute candle. So after I was in the money and it began hitting resistance at $51.17, I moved my stop up to $51.08. Next candle had me move my stop to $51.18 and then to $51.27.

Cop made it as high $51.38 and then came in. I had an offer up near $51.50 and thought it would make it up there, but wanted to lock in my profits on this choppy day of trading. COP came in and triggered my stop and I was out for a 28 cent gain.

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