I have recently been looking more and more into smaller cap stocks. This is where the money's at (of course, if we're wrong, then its mega pain).
Well I found out I cannot Short ENER because my brokerage doesn't allow it...but ENER got me interested in a new sector - solar
In particular Solarfun. Keep in mind this is a VERY VERY volatile stock and like PWRD, it is NOT FOR THE FEINT OF HEART. Make sure you examine your own risk tolerance and investment objective before looking into this play.
With that said, SOLF as shown on the charts, have PLUMMETED from its all time high at $40 in January all the way to $8 dollars in middle of March. Unbelievable decline (But for bottom fishers, they have already enjoyed over 100% return on their investment). With summertime approaching this stock has been silently creeping up. And today the most noticeable action to me is the breakout from its 200DMA
Whenever there is a confirmed breakout over a long period of time (this is 3 month chart), that is VERY BULLISH. All the indicators are maxed at the moment so I'm not jumping in yet. But I am paying VERY VERY close attention to it. The stock is up 9% today along with the entire solar sector. Should this pull back a buck or so at around 16 I am ready to dive in for a trade. This stock has very big moves just like PWRD does and I would not be surprised if it even touches 20 in the very short term. Today's intraday high was already at 18.35 so from 16-20 would be over a 20% gainer.
If the overall market indices continue to follow the pattern we've seen over the past few days, today is a big move up, tomorrow we should see selling pressure again. Just my speculation. We shall see.
- DL
Disclosure
Long GOOG, V
Short USO
Update 1:
We had a pretty nasty reversal at the last hour of trading. The volume was light all day and then all of a sudden the sell programs just went into overdrive. All the indices (in particular the Nasdaq) touched the 200DMA, appeared to have pierced it, and then reversed hard into the close. Watch out tomorrow should the sell pressure continue to push on. But if we get too oversold, watch for a whipsaw reversal as well. No matter what happens, if you are trading the volatility, make sure you stay quick and nimble.
Let's see if the SOLF will have a big oversold pullback now. Apple tanked really hard from it's intraday high, same with google, Visa, all the solar stocks. Everything was pulled down. My USO trade may prove to be a winner now. I am feeling good about holding on to it.
Good luck tomorrow
- DL
9 comments:
x-man,
I notice some new plays...What screens or tools do you use to find new stocks? I know a lot of people run screens based on fundamentals, so if you do that what do you use? If not fundamentals, what other tools or criteria do you use to select a stock you'll trade in/out of?
Btw, hows Scottrade Elite (charts, etc)? and if your familiar with ameritrade (what i use) how does it compare? If anyone knows, fill me in.
monkies,
I use a tool on Scottrade called "Trade ideas" where I can set criteria for stocks I'm interested in and it'll generate a list for me. It is not a bad tool.
hahighbaby,
I think the scottrade Elite program is pretty good. I also have a Charles Schwab account so I also use StreetSmart Pro.
I do not have experience with the TD Ameritrade tools though. But from some previews I've seen before it looks to be a very solid program as well. What are some of the things you like about it?
ameritrade offers the exact same features that i see in your screenshot in scottrade elite.
Been using ameritrade for over 1.5 years. But never really delved into its features, tools available.
I use zecco as well, and it sucks. Zecco is ideal to keep commision costs down, but its tools are non-existant. Overall quality just blows.
I bought USO - mostly on a whim - I follow your logic, but have read your disclaimer...
So - when should we consider USO a busted flush and bale out? Or - how long should we wait.
V.
I used the TD ameritrade screener...the issue with the screen is you can't pick multiple growth criteria (i.e. eps this quarter up 15%, eps next year up 20%). Yahoo Finance allows that, but not all of them work...i'll try my scottrade screener.
ahighbaby,
Yea the Scottrade Screener is great. To be honest since I use both StreetSmart and Scottrade Elite(STE) I actually think the Scottrade is more intuitive and have a lot of good features. StreetSmart to be honest sucks compared to STE.
STE I like using the trade idea tools, it also provide excellent layout of market snapshot, advancers/decliners, currencies, call/put ratios, everything in one place. I'll take some screenshots of all the features to show you.
v,
I will say that Oil is going to probably be bullish in the long haul, but from USO's technicals we could just see it is too overstretched and needed to pullback. Looks like we're starting to see that today.
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