Additional Trades

Shorting AOC at 37.07. Stop is at 38.50. That means max position size is 1500. Will short 1500.
Target is 31. Margin is $11121.
Shorting PCU at 13.80. Stop at 15.10. Max position of 1500. Shorting 1500. Target is $9. Margin $4131
Shorting LNCR at 24.05. Stop at 25.5. Max position 1300. Shorting 1300. Target is 21. Margin $6253

Longs to watch: AYE, BTU, CAH, DRQ, EGOV, OCR
Shorts to watch: CELG, CXO, DNA,

Early Trades

I am shorting CRS at 17.10. My stop is at 18.15. Max position I can take is 1900 shares. Will short 1500. Based on 20% margin, $5310. Target is $11.

Two trades to watch

Here are to stocks that I am pretty high on right now from a trading foresight point of view.

DRQ: This stock has been on my radar since mid january when signs of a trend first started to show. This stock made a higher high yesterday, and then today began to come back down. I am looking for this stock to hit the trend line in the 23-24 area (highlighted in blue). If this happens I will be looking to enter with the trade with the expectation of a new higher high. Support just so happens to be around 23.70. Resistance is at 29. Thats a nice 5 point move that ill be anticipating to be a part of.

Rio is another stock that just hit resistance yesterday and is looking to come down to support. I have emphasized what I am seeing with big bold Red lines on the chart. Resistance is sitting around 15. Support is rising. I am anticipating a bounce off the trendline support, setting up a nice ascending triangle pattern. I will take a premature position at support (I anticipate to be right around 12.75) and will keep my stop tight incase it falls through. The upside potential based on this pattern is 19. I am expecting this pattern to hit bottom and begin reversing end of next week to early the following week.

Other chart less stocks i like:

Longs: ABX (trendline bounce today), ARO (buying on pullback to trendline), CAH (trending), EGOV (ascending triangle), OCR (trending)

Short: ADBE (trendline bounce today), CELG (ready to bounce down), CRS (head and shoulders)
PNRA (resistance bounce)

So the past two days have seen a good 200+ point move followed by a day of giving those gains completely back. In the S&P500 the chart looks to be forming a triangle pattern. The lows and highs are being slowly squeezed together. The index closed sitting directly on support at 845, with the next level of support present at the last lowest low around 800 to 810.
On a 30 minute chart of the S&P500 these support levels can be seen much more clearly. Resistance levels on the other hand occur at 855 then stronger resistance at 880 where yesterday's high hit its head and rebounded.

The NASDAQ looks much the same on both the daily and 30 minute charts.

The major difference is that the NASDAQ is holding at support levels at 1507 that correspond with the support found at 855 on the S&P. Not quite sure what the significance of this is yet (if it even is significant) but it certainly illustrates the slight disconnect in price movement between the two indices. Other support levels on the NASDAQ are located at 1490 (the equivalent of the 855 level in the S&P) and at 1440 where the most recent lowest low occured on the last downswing in the index. I think all indexes will kind of stumble roughly sideways until the end of next week.

Down to one

Just after open, and I am closing TTI, leaving me holding only EQ. I currently have my eye on several other stocks. GME and DRQ are still on my radar. I am curious to see how they respond in another day or two when they have come back down to their nearest support. Additionally, RIO looks to be forming either a double top, or perhaps an ascending triangle. I am giving this about 3 to 5 days till it reaches support.

GERN

sold half at 7.61.
Sold the other half at 7.50

Stocks From the watch list

Stocks catching my interest this morning:
Longs: ASEI (hitting horizontal resistance), CAH (trendline bounce), CPLA (ascending triangle), DRQ (new 2 month high),GHDX (bull flag),MCK (trendline bounce), GME (ascending triangle)
SHORTs: PG, SAM, AOC, PSYS(descending triangle), FAST (descending triangle)

To be fair, when i first made my watchlist, i was primarily looking for bullish stocks, so the list is disproportionately represented by stocks that may be predisposed to going higher. Also, many short candidates are trading below $5 which is a price level i generally avoid. The number of shares I would need to short in order to generate good %profit would be to large.

Premarket buzz

Premarket open, the DOW and S&P 500 futures are both just above fair value while the nasdaq is just under. This indicates a mixed open with the DOW and S&P opening slightly higher and the NASDAQ opening slightly lower. With an hour to go before open these could obviously change. As for my positions, GERN is set to open below yesterdays close. I will close out at 7.50. While im not selling at the highs, i gave the stock room to run, and now it looks to be coming down. If it opens above 7.50, i will take half the position off the table and close the other half at mystop. EQ and TTI both have a bid ask spread that surrounds yesterday's closing price. This indicates a relatively flat open in each. To put these trades in perspective, EQ closed at resistance yesterday (both horizontal and verticle) so it will be interesting to see how price responds today. TTI is much the same, closing at horizontal resistance. Im raising my stops in each of these to $35.50 for EQ and 4.75 for TTI. In general i need to reduce my position size in EQ. The stock currently holds half my portfolio value, and so it needs to be lowered. I am adding in a rule that no stock can represent more than 20% of my total account value. This will be reduced as the portfolio value increases.

Raise em Up

Raising my stop in GERN to $7.00. Looking for EQ to break above resistance at 38. TTI has resistance in the 5.15 to 5.25 area that its having trouble working through so far. PNRA is creeping nearer and nearer to my stop. Just watching to see if my stop gets triggered. Other than that, the week is off. And the only thing i can really say is thatyou gotta love earnings. Reason i say that is a stock like FCX which I thought had some pretty poor earnings is off to a big start early. This is why i trade based on technical signals only. I just dont know enough about fundamentals to truly and accurately gage a stock's strength. I trade by the old cliche that the experts have already priced the earnings into the price. So i just sit back and try to figure out where the money is going and i follow.

New Positions

I took down 2 more positions. PNRA i sold 1000 shares short at 47.95, watched it run up 50 cents and am now watching it bounce off diagonal resistance. I already explained this trade in an earlier post. I also bought 3000 shares of TTI at $5 even. This is a trending stock, so i dont have a price target as of yet, instead i will keep bumping up my stop and wont close the trade till the stop gets triggered. Right now my stop is at $4.45.

I Love It

I love it. Im talking about being in the right place at the right time. GERN just got approval by the FDA to begin key stem cell therapy research. And wouldnt you know it, the stock opened up 20%. Ill keep an eye on it for the morning and bump my stop up to $6. Others that are still trying to figure out their direction include EQ, which at the time of this post just shortly after market open, is holding at its diagonal support. PNRA is rallying towards its resistance, so i will be looking to take up my short position very soon. Others on my list include PCU which is sitting on support (im bearish on this one), and TTI which is resting on its diagonal support.
Major indices quickly approached all of the key support levels that I layed out yesterday. They remain in this area, so we'll see what the day brings. As I already said, if support doesnt hold, it could be another emotion and wild ride down to the lows in november. Im talking about the heads on CNBC screaming for mercy, and crying out the end of the financial world. They can be so entertaining when they panic like that. LOL!!!
Cheers.

Support Holds

Markets didnt look to bad today despite the sell off across all major indices. The reason i say this is because the S&P500 and the Dow both held above support at around 805 and 7900 respectively. The NASDAQ had a larger relative drop than the other 2 indices, but it to is holding at support above 1340. While i think these support levels will hold, (speculative only), if they do break it could cause the kind of chaos that i sadistically enjoyed watching during late september and october. A break of current support would most likely mean a test of the lowest low across that occured 11/20-11/21.

How Bout a Bearish Position

Of the stocks I mentioned yesterday that I am bearish on, none look better than PNRA.

This stock recently broke down from a Head-and-shoulders pattern on 1/13, and has moved back up to retest resistance around the $47.75 level. The play on this is to sell the stock short, (although i usually use puts to play the market short). However for simplicity sake i will stay with the stock only. The stop is set to $49.01 with a price target of $39 based on the pattern breakout. I will take a position early morning sometime after 10:00 est. 1280 is the max number of shares that i can short. Assuming a 20% margin for the short side as well, with a position of 1000 shorted shares is $9600 set aside for margin purposes. To make this techinical pattern more ideal, the estimated $8-9 move is about 20% of the stock price. I have found, as have many others, that %20 moves seem to be very regular healthy ranges of movement.

Buying EQ at 36.14. Stop at 34.99. Max share of 1725. Buying 1500 right now. Target is $40.

Here are some of the stocks on my list.

BTU is in an uptrend and is at the trend line currently making it a good entry point tomorrow in the morning. Stop is at 22.75. Target is 29 with the next resistance level after that at around 36. This stock could provide a couple of good swing trades in the near future.

BVN has a formation much like BTU. Both are energy stocks so its no surprise. Current target is 20 with a stop at 14.90.



















EQ and TTI are much the same as BTU and BVN. Both are in short term uptrends and are bouncing off of diagonal support. Ideal entry would have been the end of the day today, but early morning entry after 10:00 may also provide another decent entry opportunity. Embarq has a price target right now of 40, with 43 being the next resistance after that. Exit at close below 35.25. TTI is very similar. The next two resistance lines are at 6 and 7 with an stop at 4.60. Again, ideal entry was today but tomorrow between 10 and noon may also provide a relatively good entry price.

First Positions

My current market outlook is neutral:bullish. This is slightly contrarian to what the talking heads on CNBC are saying, thus part of my reason for having this outlook. That being said, stocks on my current radar are GERN. I am taking a long position in this stock if it closes at or above 5.20. By stop is set to 4.75 so max position size is 4500 shares. Initial position size will be 2000 shares.

Other Stocks Im Watching:

Long: BTU, BVN, DRQ, EQ, IPHS, LPNT, ROST, SIGM, SLM, THOR, TTI

Short: FSTR, HRBN, PCU, PNRA, PSYS, SAM, SIAL

More on these later

Trading Rules

These are my general guidelines that I follow. With rare exceptions I follow these rules:

Before Entry:
1. Identify the direction of the stock and why it is going in that direction. Is the stock trending, or is it a pattern breakout.

2. Determine the stop loss at which the position will be exited if the trade goes against the anticipated move.

3. Determine the expected price target based on pattern breakout.

4. Take half the position off the table if the stock reaches the price target. Additionally, adjust the stop out point (a trailing stop).

5. For reversal patterns like head and shoulders or double tops, take the position in anticipation of the breakout, with the stop at or just past the shoulder hieght.

6. For continuation patterns, enter at end of day following a breakout but only as long as the breakout is sustained.

7. For trending uptrending stocks, determine the diagonal support, (or diagonal resistance for downtrending stocks). This will behave as both the entry and exit point of the trade. Enter when the stock is at or near the support on the trend side. Exit is placed just below the support.

8. Maximum position size is that at which 2% of the account will be lost upon being stopped out. Most continuation patterns will be entered half before the breakout and half at the break.

9. Scale out proceedure is used for stocks that are profitable where half the position is exited upon reaching the price target, and the other half held until stopped out by the trailing stop. Additionally, the have out position can be reentered upon a stock bounce in favor of the position.

10. Market outlook is important to determine ratio of position types Long:short. For Bullish markets, the ratio of long to shorts is to be 2:1. Bearish markets the ratio of long to short is 1:2. Neutral markets the ratio is 1:1.

Mission Statement

My name is Dylan Dupuis. I am currently a graduate student pursuing my PhD in molecular biology. However, i have a deep interest in the stock market and in making money through trading. I have been actively trading both stocks and stock options for the past 4 years. I am self taught, having followed various blog sites and read just about every book I can lay my hands on that have to do with the stock market. I will be using this blog as a kind of specialized journal where i lay my thoughts out to the public on what stocks i am looking to enter and why, as well as why i may exit a trade early. I have found that technical analysis suits my personality. I generally like to hold a position for a week to 2 months at most but have on occasion traded for times outside that range for various reasons. That being said, the length of time I am in a position is not what is important, but rather the reason for why I enter and/or exit a trade. My trading rules are simple and cliche, ride the winners and cut losses short. I always have predetermined stops upon entering every trade, and have found that while i am not always correct on every trade, I do have the ability to follow my rules and generally outperform the market. This blog will begin with an artificial $100,000 account that is a scaled version of my own personal account. Many of the trades I take here I am also taking in real money with my own account. That being said, the goal is to use this to generate portfolios that will be successful and easy to manage. The plan is to determine position sizes based on the amount I am willing to lose per trade, ~2%. By determining my stop loss ahead of time, i can back calculate the share size i can hold that would lose 2% of my account should that stop trigger. At the end of each month I will update the account total and will compare it to my performance in the past. Hope the readers can learn from this as well.