Entry Point and Trade Plan for Western Digital (WDC)
Western Digital is a perfect example of why I don’t buy breakouts. I like the company and the hard drive story so I have been watching WDC since it broke out on March 22nd. Just look at all the nice information WDC have been giving us while it pulls back. First of all, the retracement has been orderly and on light volume. Secondly, you can see that the big money is accumulating shares on any weakness. I need to see both of these characteristics before I buy the retracement. The last thing I do before entering a trade like this is to use the Range Expansion Index (REI) . I...
read morePotential Trade: Denbury Resources (DNR)
Here is a potential trade for a bounce in the energy sector. DNR is testing its breakout area now. I have marked the stop loss and targets on the chart. ShareEmailPrintDigg
read moreCisco (CSCO) Strength
The rules that I use required me to sell CSCO a few weeks ago (or so I said). The original position was just a trade based upon a Sequential Breakout signal and my reason for buying was perfectly sound. The problem was that the market strengthened and I began to treat CSCO differently. I should have sold when it bounced and hit my target, but instead I held it as if I originally bought it as a trend-following trade, which used trailing stops to exit trades. Such an exit plan did not match my original plan and it cost me. Luckily for me the market is presenting a very similar trade...
read moreUsing REI oscillator to time trades
Now is the time to remain patient. Maintaining discipline can be especially difficult when it seems like you see breakouts in every stock BUT the ones that you own. Even worse, you might become frustrated because that particular stock you have been patiently watching didn’t pull back quite far enough to buy and now it is up 30% without you. So what can be done to help ensure that you don’t miss out? I like to use the Range Expansion Index (REI) to help me time entry points. The REI is a nice oscillator that responds to prices more than other well-known oscillators. The key to...
read moreNice Setup for PROS Holding (PRO)
I picked up an initial position in PRO today. It has pulled back from a breakout and volume really dried up today. I like the setup but it is thinly traded so be careful. Give it plenty of room and use a stop of 16. The 3:1 price target should be 26. The fundamentals look good for this B2B software company as revenue has grown 34% over the last 4 quarters. From the PROS website: PROS provides pricing and revenue optimization solutions to companies in the manufacturing, distribution, services, hotel and cruise, and airline...
read moreMore trade ideas: CLB
Last week I was watching KLAC and CLR to see how they reacted to the support levels created by their breakouts. Both bounced and pushed higher, with CLR reaching new highs. Another stock I’m watching is Core Laboratories (CLB). It has pulled back to the breakout area on lighter volume and I will consider it for a trade. Stop loss should be set around 118.50. ShareEmailPrintDigg
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