mysidetrades: February 2008

Tuesday, February 26, 2008

Use todays dip in DRYS to get some!

DRYS dropped from high of 130 last year to 50 and its rising since double-bottom at 50. I used todays 6% drop (DRYS below 80) to get some short term options (March 85 Calls at 3.60), Read this article from Seeking Alpha.

Sunday, February 17, 2008

Is China Bull in trouble?

Guess work aside, the long term growth in China and Asia seems to be a strong case. I have no way of telling otherwise, calling it a bubble or "Irrational exuberance", leave it to Feds and economical gurus to fight it over. I am just comparing an ETF following top Chinese stocks trading in Hong kong and CHL (China mobile, the biggest stock in that group). FXI seems to hold 140 level for the past one month but failing to clear 158, and for CHL, 71 seems to be holding well, and 80 being the resistance level. Now we are in the midst of the 1-month channel and can not place a trade with conviction. I am watching how well the resistance levels are penetrated to establish a bullish case or watch out for breaking's bellow the support lines for possible bearish trade. Either moves will result in drastic changes in either direction, and one could profit from observing moves outside of the trading channels. I will be watching (for possible bearish trade).

Tuesday, February 5, 2008

Long Term Hi-Tech. choice

Yesterday's momentum stocks are thrown out on heavy volumes in the past 3-4 weeks, Microsoft buy-out offer to Yahoo maybe a good long term opportunity, looking into buying MSFT bellow 30 (28-30) or Yahoo at the current price. If you look at Google charts you may find couple of supports (going back to mid-May or mid-August of the last year), 460-480 range, That could be good for a trade. Well I thought 500-515 would hold but didn't. next stop is 480, I think GOOG has a good chance to bounce off that level.

My trading rules:

Here are a few trading rules that I found working for me over the past 15 years.
A. Try to follow the steps of the elephants (i.e. big mutual funds and institutions).
B. Its not my goal to predict the bottom for a falling stock or hoping to sell at the top.
C. I will be happy to pick the right stock, make a trade in the right direction, and take profit.
D. Always look for shorting opportunities in the market. Fear is a powerful emotion which can drive the stock price to lower levels.
E. Do not see how one can survive without buying puts to protect against bad market. (well If you have short positions a falling market is a good market).
F. Try to allocate not more than 20% of my trading budget for each trade. Always have 15-20% cash and survive my bad decisions and losing trades.
G. Not in love with particular stock or industry group.
H. Always on the hunt for opportunities in the entire equity market.
I. Step away from battle field. Avoid trading one week before and after earning announcement. Digest earning calls and company announcement before getting into it. When you gamble , the house always wins and you lose.
J. Rapid fire moment, does not lend itself to smart thinking.
K. Pressure is mother-of-all bad decisions, don't pressure yourself.
L. Never kick yourself for taking profit.
M. A money management tip: You get out, when getting is good, before you blow yourself up.
N. Its Ok to take a pass on a trade, listen to your inner Clint Eastwood, "Man got to know his limitations."
O. Assess your down-side before entering a trade, not your upside.
P. Always have 10% of your portfolio in cash, and consider yourself fully vested, if you are below 10%. Need to sell some positions to raise cash.
Q. Have a list of good stocks to buy from, look for pullback and be patient. Not having a list to pick from, is a good indication that you have not done your homework.
R. Refrain from trading on a volatile day, let the dust settle, and let the amateurs play. Enter a position when more odds in your favor. Playing earnings is a dangerous way to gamble.

mysidetrades