For the upcoming week, I have NanoString Technologies $NSTG on my watch list. There is a lot to like about this stock for a potential swing trade. This stock has a small float, a high short interest, and a good looking chart, which can be a great combination for a short-term breakout. $NSTG has been consolidating nicely since the beginning of March which has led to a rising 50 day moving average that is close to crossing the 200 day moving average; this is a bullish technical indicator known as the Golden Cross. In addition to the possibility of a Golden Cross, the chart is presenting a Symmetrical Triangle, which in combination with the rising 50 day moving average, is another bullish indicator.
I am now long Lululemon $LULU as a swing trade. They report earnings on Wednesday, March 30th; and with a staggering 25% of the float sold short, we could see some short covering into the earnings report. On a technical basis, $LULU has been consolidating since the last earnings gap and has a rising 50 & 20 day moving average. I have set a closing price stop at $62.30 which is the 20 DMA. If you want to see how I sized this position, I have posted a guideline to position sizing here. Continue reading “Lululemon – A Swing Ahead of Earnings on $LULU”
The rhetoric associated with the Presidential primaries has led to fears that America’s right to bear arms, as described in the 2nd Amendment, could be in jeopardy. The passing of Supreme Court Justice Antonin Scalia on Saturday will likely be a gas can thrown on the fear fire as it is perceived as unlikely that the President will appoint a Justice, to replace Scalia, that is friendly to the 2nd Amendment.
This makes the gun stocks like Smith & Wesson (SWHC) and Sturm, Ruger & Co. (RGR) worth a serious look for a potential swing trade. These stocks were setting up nicely prior to Saturday’s sad news. Continue reading “The Gun Trade May Be On: $SWHC $RGR”
This post examines longer term trades, not day trades.
You have just put on a trade and you have sized it according to your risk management strategy, which means you have calculated the downside risk before putting on the trade. When this trade starts to work in your favor, what do you do next? When do you exit?
This question comes up often in my discussions with fellow retail traders. It’s always best to know the exit strategy before entering the trade, not only from a risk management perspective but also for managing your winners. One way to know this is to define the trade by asking yourself the following question: is this a swing trade or a position trade? Continue reading “Stock Trading 101: Selling Winners – Swing vs. Position”
If there is one thing the markets have taught me over the years, it’s this: becoming proficient in markets is a continuous process and continuous processes deliver lessons continuously. Here are five lessons I learned (or relearned) in 2015: Continue reading “Stock Trading 101: Five Lessons Learned in 2015”
“If you learn why people lose and thereby control losses, profits will follow”
The above quote comes from the book: What I Learned Losing a Million Dollars by Jim Paul. The premise of the book is that while there are many ways that people win in the stock market, there are only a few ways that people lose, therefore, rather than study all the disparate “winning systems,” we should seek to understand the small number of ways that market participants lose money and avoid repeating them. It’s a great book and it got me thinking about all the conversations I’ve had with retail traders and investors and how so very few of them talk about their trading plan and how they manage risk…. Guess what! Having no plan and not understanding how to manage risk are two of the ways in which market participants lose money! Continue reading “Stock Trading 101: Learn to Manage Risk with Position Sizing”