Trades 4/7/10

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As the Dow nears its 11,000 ceiling and bounces off of it, many have been wondering where all this strength is coming from.  Many of the stocks I regularly trade have been active, yet those I hold have been penny bound.

Having bought both sides of the coin on UAUA, it has stagnated in the 19.20 to 20.20 range after jumping $6.00 since I last sold the stock.   The options I hold are a small fraction of the gains made, selling it on a trailing stop in January. 

The surprise has been RDN, which is usually very volatile and rarely stays at its top or bottom for more than a few days.

After holding at $224 for two weeks,  AAPL jumped again.  I sold this one in January for a $20 per share gain and neglected to buy the dip at 190 again.

Yesterday, SSN popped for its second leg up, hitting .85 - sure to be short lived.  See the chart below. 

Current Holdings

Symbol	Security	Entry	Last	Change	Exit Plan
QTWW	Stock	0.9179	0.686	-0.2319	N/A
BCON	Stock	0.44	0.4422	0.0022	N/A
UAL.Apr.25.Call	Option	0.18	0.04	-0.14	N/A
RDN.Apr.10.Put	Option	0.10	0.05	-0.05	N/A
UAL.Apr.15.Put	Option	0.23	0.04	-0.19	N/A

I have always doubled up on SSN, but in this case, I would have to say I did not see the second run coming.   SSN hit .37 about 5 days after I sold it at it's peak of .57

I have made the mistake of getting back into this stock too soon many times. I normally buy back in anywhere below .33 and sell between .55 - .60 with .30 being the absolute bottom over the years.   Last time, I held through the dilution and, of course, doubled up with a cost basis of .27 / sale at .57

The following chart shows where I have bought in (Green) and where I got out (red). 

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Trades 1/20/10

The Dow dropped 100 points in the first six minutes of trading, eliminating that long crawl up that we had yesterday.  It is as if Tuesday never happened.  With all the positive sentiment related to the two major buy-outs yesterday, today those who bought in, are dismayed.


UPDATE 1-Fitch downgrades Kraft, Cadbury on takeover plan
Wed Jan 20, 2010 8:00am EST

A few stocks that have been gaining this morning.

UAUA - United Airlines - gained 0.25 in the first half hour
RDN - Radian - broke out hitting 8.11
C - Citibank - climbed to 3.60

I usually buy performing stocks when the market dips, as was my strategy for C yesterday.  The market didn't dip yesterday and C gained some ground.  Today C dropped a bit but is gaining in spite of the gap down and downward trend first hour.

RDN broke out early on, in spite of the gap down, and may be worth buying if this is truly a dip.

If this is an extension of the downward trend we had seen last week, then we should be joining the crowd, looking for a good candidate to short.

I already own puts purchased when the Dow neared 10,700 a week or so ago..
UAUA, February, strike 8
TS, January, strike 40

Update...

Updating the day, markets opened higher due to several large deals. All indicators pointed to a lower open as I said in my last post, but the market reacted with heavy buying on CBY and CFL.

Investors.com - Major Indexes Open Higher: "Industrial conglomerate Tyco International (TYC) on Monday announced plans to spend $1.9 billion to buy Broadview Security, which operates for Brink's Home Security Holdings (CFL)"

My guess is that the markets will return to their downward trend after the buying frenzy is over related to the above mentioned buy-outs.

The strategy I laid out for C did not play out because the markets did not open lower.

We have not hit our buy stops on RDN or SOLF as of yet. SOLF is to release 2009 yearly financial data on March 5, and if seculation on that news is positive, the reaction will trigger our buy stop.

Trades 1/19/10

Watching the action before the bell, I suspect a negative start, if not a negative day today.  World markets overnight were all inthe red (except HK which dipped heavily last week).  Oil is down at 76 and change.

That could turn around if Kraft (KFT) finalizes their bid for Cadbury (CBY).  Watch CBY jump if that is the case.

Other big news on Citibank (C) which is reporting a huge loss due to plans of paying off Uncle Sam.
I had thought of shorting C until I looked at the Call volume which is unusually high.  Consider setting a buy stop on C at 3.45 in case the day forgets to continue its downside action of late.
If C drops, I will be setting a buy stop at 0.08 above current price.  I will be adjusting that stop as the stock drops, hoping to catch the bottom as investors over react to the news.

Solarfun Power Holdings (SOLF) and Radian Group Inc. (RDN) both had very good runs until the market started downward. These two could recover quite nicely, if the market trend should turn around. Consider the following buy stops.

RDN -  open 7.78 - buy stop 8.06 - sell stop 7.76
SOLF - open 8.30 - buy stop 8.65 - sell stop 8.29