Gold Bustin' a Move

With the strength I've seen in numerous gold stocks, I pulled the trigger on the junior miner GSS in hopes of a gap up over $1.32 and a subseguent bull run. I still like CEF and JAG; GFI made it's break on strong earnings today. Did grab FLIR Feb $25 calls.

Bullish on FLIR, HAS

Watching Feb $25 calls on FLIR very closely. Also anticipating a bullish move by HAS; GILD, UTX, PCR, ASTE have begun to take off. Expecting a sell-off in gold as a opportunity to move in. CEF, GFI and JAG are my top three favorites.

Shifting Sands

Still watching and waiting for expected sell-offs with CEF and AUY and UTX to match what I'm seeing in the oscillators. Did pick up ABAX today at $14.25. Previously not on my watch list but a very strong buy signal nonetheless. Would have liked to come across it sooner and get an entry at the $13.50 level, but I expect positive reaction with earnings on the 30th. Sold poistion it BABY for a small profit - taking longer than I anticipated while technical strength has deteriorated. Gained almost 10% since buying HLIT yesterday. Now comes the trouble with trading equities versus derivatives: I can't sell until Friday - hopefully the gains will at least hold - wheras calls would settle tomorrow morning.

Buy Signals for Nokia, Viacom

Looking more closely at the stocks mentioned yesterday, NOK below $11.80 and VIA below $16.50 would seem to present extraordinary short term opportunities. NYX has slipped out of favor for the purposes of my system. I expect ASTE to continue to slide in the coming days. I am starting to believe the boat has left the dock with regards to AUY and CEF. Buying on a pull back may be a good option as I see a lot of strength pushing these 2 names higher.

Picks for January 25, 2009

Here are a dozen highly rated stocks per my system:

AMAT ASTE AUY CEF GILD HAS NOK NYX PCR UTX VIA WWW

While I expect a significant move higher over the next 4-6 weeks, I also expect and am cautious of a significant intraday sell-off in the near term producing another deep stochastic trough. With this development I would A) beging to watch the hourly RSI oscillator for a trendline to cross below 50 before B) monitoring the hourly/15 minute Williams' indicator for a trendline to cross through -100. As this event nears I would accumulate more and more aggressively.

I'll try and pick precise entry points as they develop as well as updates of where these equities trade in the coming weeks.

Time To Get Serious

In hopes of building an investment advisory service based on my technical analysis protocol, I thought it prudent, after talking with my wife, to outline my views on risk/reward as it pertains to my system. Risk and reward can can numerous conotations, and in this scenario this is true - on many levels - and paramount to successful trading. I approach each opportunity equally aggressive and conservative. As for risks, is it discretionary income? ie, could I afford to lose it all? Is there enough time before option expiration for appreciation to bear fruit at a slower pace? What is the spread between the option and the current price? How much longer can I wait and how much lower might it go in the interim? ie, will there be a better entry point in the next few days? hours? minutes? In some cases with lower priced stocks, it may be beneficial to buy the stock outright, particularly if there is a high yield or unappreciated disconnect in fair value. It is imperitive to consider an exit strategy should things turn sour. How tight will that stop measure be?
As far as reward, the results should speak for themselves. At one point I was compounding 15% every 3 business days. By continuously studying and trying to learn from my mistakes, it may be possible to outperform these results with better returns on fewer transactions. I recommended HOLX deep-in-the-money calls with a bid/ask of 3/3.5 when the stock was trading at $10.50. Within 2 days the stock was over $13. An easy double.
Of course, 'with the market the way it is', it is harder to believe in the system. Employing concentration, patience, and precision, with a bit of healthy skepticism but an unwaivering confidence in oneself, good things will undoubtedly happen!

I also want to add that whenever I describe my system, someone inevitably says, "Oh, so you're like Lenny Dykstra?"
I believe he looks at larger companies trading within a well defined range, buying deep-in-the-money calls near the low end of the range in anticipation of a move toward the high end. Having looked over countless charts, I look for very specific footprints among technical oscillators foretelling of major upward reversals (who isn't though, right?) I look for stocks being oversold in preparation of monster moves. Imagine if you will a car skidding around a corner - the tires are screeching and pointed in the right direction but the car's momentum is still in the opposite direction... until the wheels start to grip! Many of the best moves - or rather, best periods during which to own a particular stock - demonstrate my events as a precursor.

Please feel free to leave a comment. I'll be making recommendations as they develop.

Just for fun, I'll throw one out there that I came across tonight:
VIA Viacom Class A Voting Shares February $12.50 calls have a Bid/Ask of 4.3/5 with the stock closing at $17.04
How low might they go? I don't know yet, but it just might be worth it on a big down day.

Been Too Long!

Hey Now! Been too long since I rapped at ya, so I thought I'd check in. Well oil collapsed, but it's had no positive effect on the economy. Not many stocks have escaped the calamity so it's been nearly impossible to avoid losses (thank you, NStar!). If Templeton was right, I'd say we're at the beginning of the end. Wading in to invest in strong companies is still hazardous but I think dividend income and reinvestments reward patience at these levels. Companies maintain strength in numerous fashions: ingenious management, pristine balance sheets, technological innovation, growing revenues...

I have numerous stocks that I am watching now and will try and keep you updated on my progress. Success with my methods has been brought about previously with strict rules and patience. Keeping your eye on the ball, licking your lips, and stepping into a big fat meatball... we hope!

Just realize I hadn't been here since April. Needless to say I got in pretty close to the panic bank bottom in July (that day maybe?). I made some terrific gains and put it into coal and natural gas... and promptly gave my money back. Tried to stay afloat but the tides kept sinking. Been studying hard though.