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My RHAT trade did not get filled. At this point, I will look for the 38.2% retracement of the rally. I will keep you posted. The chart below shows the long-term Elliott wave analysis. At this point, several options are good, but this is the one that offers the highest rating:
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About AMLN:
The stock is rising and making new highs. That does not mean that we should remove our contingency order, we simply raise it, and this is how:
From the previous daily low (made in early Sept at $29.9), using the Fibonacci tool in StockCharts.com, find the possible retracement points. In this case, AMLN's 61.8% retracement would be at $31.75. I have modified my contingency order accordingly.
17 comments:
Well done catching RIMM and RHAT, it again has made the move before I could get in.
Fortitude, I am not "in" yet. I set my order, but it has not filled.
I have a PCCRC on RIMM, but the decline in volatility has hurt me.
I will post when RHAT is filled.
Juan,
From the previous posting I stated the reasons for the listing of stocks, which I believe fulfilled your ‘initial’ Sarmiento System 'sweep' using Platinum.
Of all the ones I can initially review with regards to Yahoo, I like SWIR, FIC and FORM. AHMC could be in line for a ‘correction’.
I shall evaluate all four later on Metastock and post my comments on this Blogger. It would be interesting to read your comments too.
RHAT,
As I post on IB has made a 28% move up. Surely this move is too much for your system, as it could have exhausted its momentum. Also I can see the 2 minute bars on IB analysis as wel and this stock moves 'dramatically' down on some ticks. At 14:12:00 ticker it moved $1 down and this also happened about nine times earlier from 9:30 am to 11:30 am.
Also what is PCCRC, and the other terms you refer to? I know they must refer to ordering type, but please clarify. Thanks.
I DO use Yahoo to figure out who has an average volume of 1M shares or more. I focus on stocks that are trading at at least $12.5 for bullish trades and $20 for bearish trades.
I then avoid stocks that went up on analyst upgrades/downgrades alone. I look for a strong catalyst such as earnings and future expectations.
Do you still like these?:
http://finance.yahoo.com/q/cq?s=SWIR,FIC,FORM,AMHC&d=v2
PCCRC is Put, Call Calendar Ratio Combination as defined by Lawrence G. McMillan (see my book recommendation above). You can also see the previous posts in this series, specifically the BRCM trade I followed from the begining.
I don't think RHAT is overextended, not by a long such. If you want to be conservative, use the Fibonacci retracement tool to figure out what would be a 38.2% retracement in RHAT. You may get into RHAT in a few weeks, or a few hours, it is hard to say. The FDX trade turned out for me in a couple of days.
Keep observing the movement of the stocks after such jumps until you gain the confidence necessary to make an intuitive move wand enter a trade.
Juan,
Non meet your criteria;
SWIR price not being over $12.50 FIC, FORM and AMHC are low on volume.
SWIR target price $14.27, using 23.6 % retracement line from recent low (2005) and high back in 2004 or $12.50 using peak in Dec 2004, perhaps after a 'draw back' to $10.30.
RE: "Keep observing the movement of the stocks after such jumps until you gain the confidence necessary to make an intuitive move wand enter a trade."
That is what I need more experience at.
It would be interesting to see the Ellioticain graphs for RIMM and RHAT
For RHAT using recent peak and low, the 261.8% line is at $26.50, having gone through the 161.8% line at $20.50. Now I am not suggesting it gets there, but that is a line Metastock has drawn using Fibonacci.
Juan,
Is was a former speculative stock which 'bombed out'? If so, there is surely going to be some selling from those in the previous 'ramp up'...
I would expect a 'fall back'. Then I thought that about FDX... **Smiles** What do I know?
Juan,
You using the same criteria as a ratio calendar trade when you selected RIMM for the PCCRC Am I right ?
On the ratio calendar trades, it seems that the majority of the stocks which met your criteria moves with good momentum after a few days. If IV is low, why not just use a straight call or put. Alernatively, use a 3:1 ratio calendar instead of 2:1. Have you backtested these ?
fortitude.....
I hate to use the term "experience" this is what gurus say when they have nothing better to offer. This blog was meant to avoid that. Let me see if I can explain this better. I will post later some explanation of how to wait for a better entry point on RHAT. As of right now, I missed the boat too, so there will be a chance to wait for a light pull back.
A quick calculation:
1. Look for the previous low on RHAT. i.e. about 15.9
2. Find the high for today. i.e. 21.5.
3. The rally so far has been $5.6.
4. Calculate the 38.2 retracement =2.14.
5. Subtract from the high = 19.4. If this number is exceeded in the way down then look for 50% retracement. If the retracement is 61.8, avoid the trade.
If 19.4 is entry point, you need to await for a signal such as that of the stochastics oscillator, or anyone you are familiar with. This way if the stock takes a downward momentum, you won't catch a falling knife.
Juan,
Thanks I shall be watching this one. As I said earlier there were dramatic drops on some of the 2 minute tickers on IB during the day, suggesting perhaps caution...
HK
I did have a CRC on RIMM last month. After a while I transformed it into PCCRC when it rallied enough. In retrospect, volatility was too high to enter a PCCRC. Now I am stock with a bad trade..... This is what happens without discipline!
If you are going to do straight calls, you then have to decide what expiration to choose that would not be hurt by sideways motion. If you take a long-term trade, it will be expensive and only a large move will justify the expense. If you pick a short-term expiration, you may lose big, if the stock goes sideways.
I want a trade that I can go on vacation without worry. With the CRC or PRC you don't lose big by Theta decay alone (loss of time value). BUT THE MOST IMPORTANT FACTOR:
I have exit orders contingent upon Fibonacci points strategically selected. If the stock goes my way, great, if it goes against me, it should trigger my contingency order. If it goes sideways, my short loses value. In all directions my trade is designed to maximize profits and reduce losses without making it a full time job.
Juan,
Thanks. Now I understand the reasoning behind.
You wrote about retracement to enter a trade. It seems to me that sometimes you entered a trade without waiting for a retracement. What are your criteria in coming to such a decision ?
Talking of books, have you read this one Juan?
Mastering Elliot Wave: Presenting the Neely Method: The First Scientific, Objective Approach to Market Forecasting with the Elliott Wave Theory (version 2) (Hardcover)
by Glenn Neely, Eric Hall
http://www.amazon.com/exec/obidos/tg/detail/-/0930233441/qid=1128028083/sr=8-3/ref=pd_bbs_3/104-0942114-9007154?v=glance&s=books&n=507846
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