GE Beats

General Electric Company (NYSE: GE) has reported better-than-expected Q2 earnings, while its revenue fell short of the Street view.

The Fairfield, Connecticut-based company has reported a 15% year-over-year rise in its earnings from continuing operations to $3.3 billion, or $0.30 per share. The company’s revenue fell 4% to $37.4 billion, due to lower GE Capital assets and industrial dispositions and lower-than-expected equipment sales. The analysts expected the company to post its EPS at $0.27 on $38.4 billion of revenue.

GE has generated $6.3 billion of total cash from operating activities of GE Industrial in the first six months of 2010, down 10% from the previous year period.

GE Chairman and CEO Jeff Immelt mentioned, “GE’s portfolio generated solid results across the board,” He further added, “Our Energy and Technology Infrastructure businesses performed as expected, Home & Business Solutions and NBCU turned in good revenue and earnings growth, and GE Capital delivered 93% net income growth as losses have peaked and earnings are rebounding.”

GE’s shares gained 2.30% to $15.60 in pre-market trading.

Benzinga

BRCM: Broadcom on the launching pad

Broadcom: BRCM is setting up for a terrific risk reward breakout play. The breakout level is the $37 area and the profit target is $43. In the current stock trading environment I do not recommend getting involved on the first breakout. Too many false moves lately.

I will be waiting for the first multi-day pause above the $37 level and then will begin to build my position in three pieces. Initial stop loss would be a close on the daily chart below $36.

Earnings are in two weeks (July 27) The best case scenario would be to begin accumulating our position before the earnings and sell into a good report.

Great entries are a small part of great trades

Trading stocks for a living can be one of the most rewarding experiences of your life if done properly. If you are trading all day every day for years and not making progress you are “practicing wrong.”

Of course by progress I am referring to earning consistent money.

Many of us here at Keystone have played competitive sports at one time or another, for me it was baseball and I often use baseball analogies to make a stock trading point. Today I am going to use football. Before I get to my point I was actually asked by someone at a BBQ this weekend what makes a successful trader?

While there is no “one” answer I feel one of two backgrounds give an individual a HUGE advantage; having previously owned a business or having been an athlete (especially if you went on to play at the high school, or college level and beyond).

Having owned a business you learn the importance of understanding how you will compete, how you will stand out in the market place to generate revenues; in other words you really need to dig deep to define an edge. As an entrepreneur you also learn what it means to put in an 80 hour week and sometimes not get paid, you learn very quickly the skill of paying attention to what is working and what is not.

As an athlete I feel focus, discipline and most importantly the ability to bounce back from adversity can be translated into a trading asset.

Getting back to the football analogy and your entries. far too much emphasis is placed on the entry signal. A football game usually lasts just over two hours when you remove all of the commercial breaks, each actual play is basically 7-10 seconds.

What does this have to do with trading? Everything as far as “practicing and focus.” The hard work, or better worded the reason you will earn money on on most trades is because of the hard work you do BEFORE you begin to look for an entry signal.

All football plays are mapped out for the coach before the game starts, your trading should be the same way. You want to be executing your ideas during the day, not finding new ones. If you are looking for ideas you are in a horrible environment or you are not prepared.

If you want to become someone who gets paid each month spend most of your screen time learning to identify great scenarios, one that have a high probability for follow through instead of focusing so much on your P&L and where to enter. In other words focus on IF there is something to do as opposed to where to get in.

Trading Goldcorp

Hope everyone had a good holiday. Back to business, we had a nice week last week with some big action in some names we trade. Goldcorp GG:nyse was one of them, a name which I have been trading for most of my career. Risk aversion ahead of the biggest holiday of the summer was a given. Now however we are past, the question becomes to fade or not to fade. Fading behind major top and bearish formations can be quite risky if one does not use tight risk management.  $41 is looking like a very strong number and should GG hold this number for  a little while right now, I am looking to take this with a tight stop at 40.75. There is risk to 40-40.40 so caution should be taken on entering the trade. When entering a trade such as this, ask yourself if you have a little pnl to risk. If you do not you will not miss the trade, just wait for a higher low from the last low getting long once that low is established. Money management is also an important factor so should the trade work out or makes or nears the high for the day move the stop to just under yesterdays close. Get money!!!

How Does an Active Trader Handle This Market?

Ever since the “Flash crash” on May 6th, the markets have gyrated like a rubber band – no doubt fooling the “retail investor,” who typically buys high and sells low, ultimately chasing each and every move. The buy and hold strategy of years past has proven to be unsuccessful. In these markets, where some say as high as 80% of trading is computer driven (algo trading), it is more pertinent than ever to become more of an “active trader.”

At Keystone Trading, 85% of our trading is done on an intra-day basis. In other words, the positions are closed by 4pm EDT. The other 15% of our trades are in a 1-3 day time frame. Put simply, we are profiting from the short term moves, rather than sitting back and watching profits turn into losses. We are consistently monitoring order flow and looking for “high probability” situations.

As an active trader, we rely heavily on technical analysis rather than company fundamentals. Las Vegas Sands (NYSE: LVS), for example, happens to be one of the stocks that we watch closely and trade aggressively. Technically speaking, the stock has been a beast since early March, when it was trading at around $16.50 a share. It traded as high as 26.55 before the flash crash, only to regain steam after finding support at $19 and make a new high of $27.85 on June 21st. However, once it failed to hold the support level at $25.50, we quickly sold out of our long positions and shorted the stock, setting our stop at $26.59 with a profit target of $22.73. In other words, we were willing to risk $1.09 to make $2.77 on the trade. LVS hit our price target today and we covered for a nice profit.

Do all of our trades work out this well? Of course not. But the important point is that we always calculate our risk-reward dynamic before we enter a trade. Typically, we look for at least a 2:1 ratio. The key element to an active trader is to be constantly assessing probabilities and market conditions and only to take trades when these factors line up. We never trade for the sake of trading.
As a proprietary trading firm Keystone Trading Group seeks partnerships with both new and experienced traders.

Our traders trade exclusively for the firm’s own account and are provided with the proper resources to grow their trading business.

Experienced traders with a documented proven track record will be allocated firm capital to trade.

Firm capital allocation and risk management parameters are based upon experience and performance.

Aspiring professional traders and/or those that lack a documented track record can earn a trader position with Keystone Trading Group upon successfully completing a KTC (Keystone Trading Concepts) training program.

All trainees in the mentor programs will be allocated firm capital to trade while being instructed and coached by seasoned traders. Keystone absorbs any trading losses