Monday April 13 Weekly Watch List

My first look-at stock for this week is PDLI

PDL Biopharma just recently took out a debt facility due by next year and this immediately dipped the stock until Friday April 10 when it popped up far enough to cross the 20 and 50 day moving averages in a single session on higher than average volume.

This tripped the MACD to cross upward and the RSI to cross the 50 line.

The weekly candles show a distinct hammer candle and this may bode well for the week(s) to come.

The weekly charts seem to have the 13 and 20-week moving averages as lines of resistance.  If these are broken in the coming week, then this may very well signal a reversal of the downward trend for this stock.  Friday's move was so strong that the A/D line on the weekly chart was also tipped upward after the previous 4 days were all in distribution.

SO, the trade plan for Monday is to try to acquire 1,000 shares of PDLI at $7.10 on a dip from the high, and then start looking for the exit around $7.80.  I would set a $0.10 moving stop once it passes $7.50 so that it would not require constant monitoring. 

PGN

I'm holding a little PGN into next week after it broke above its 20-day moving average on Thursday and then held support during the Friday sell-off from the traders.  That seems to indicate investor support and during after hours trading on Friday someone bought 56,600 shares on the ask price in 4 transactions.  This was either a short-seller getting out of the way or someone willing to make an $87,730 bet with premium transaction fees for after-hours trading.  If someone has got money like that to put into this with those premium fees, I bet he knows something.

I'm not planning on necessarily keeping this one for the whole week, but we'll see how the performance pans out.  There's a lot of room for this one to run if the trend actually reverses.

Week of 4/6/2015 - Friday Roundup

SGI Paper Trade - Friday 4/10/2015 Results

So here's the summary of the performance for Silicon Graphics for this week (4/6 - 4/10/2015):

SGI
               Open        Close       High        Low
Monday:        8.74        9.03        9.11        8.74
Tuesday:       9.03        9.01        9.12        8.94
Wednesday:     9.00        9.06        9.12        8.65
Thursday:      9.03        9.23        9.28        8.87
Friday:        9.27        5.25        9.41        9.07

The open, close, and low values over the week have a dip in them on either Tuesday or Wednesday, and the highs for the various days show steady progress upward.

Friday's intra-day prices show a long stretch at the 9.39-9.41 range (hours - note the exit signals in the plot above).  It's reasonable to assume that a patient trader could have taken profits at 9.40 but certainly at 9.39.  SO, if we assume, conservatively that we took profits on Friday per the plan then buying on Monday 1,000 x 8.83 at the open and then adding on the dip another 1,000 at 8.70, and then selling 2,000 x 9.39 we would have a profit of $1,250.  If I didn't add more on the dip, then I would still have made a $560 profit.

It might be worth holding SGI longer.  If it breaks $10 then it certainly has some room to run,  but for now I would call this trade closed and a success.

Not bad for letting the money do the work.  It just requires a good General to put that money to work properly.  That is the point of this blog - finding the best methods to put that money to work properly.

From last week, JIVE had a better week.  Perhaps I was just a little early to the show.

JIVE
               Open        Close       High        Low
Monday:        5.20        5.13        5.27        5.11
Tuesday:       5.09        5.13        5.25        5.04
Wednesday:     5.11        5.19        5.21        5.05
Thursday:      5.21        5.17        5.31        5.16

Monday:        5.14        5.17        5.21        5.11
Tuesday:       5.19        5.22        5.26        5.17
Wednesday:     5.21        5.25        5.26        5.20
Thursday:      5.24        5.31        5.33        5.24
Friday:        5.34        5.31        5.36        5.29

Certainly this one progressed better, but much slower.  I suppose this may be a company worth looking into the SEC filings and the books to see if it's worth a speculative investment.  In that case I would not hold more than 100-200 shares because the risk would be too high to hold more than that long term.  From the Weekly candles it does look like JIVE has plenty of room to run.

We'll check in on JIVE next week.and see how they fare for another week.  That's part of studying these picks; just because I may miss on one week, it's worth noting what happens in the weeks that follow because I'm using both Daily and Weekly data to make my decisions and for the sake of investment I would also look at monthly data (candles).

Week of 4/6/2015 - Thursday Update

SGI Paper Trade - Thursday Update

SGI moved up again today following a harrowing drop at the open Wednesday followed by an immediate recovery.  Today saw a higher high and a higher low in spite of lower volume.  Looking at this from the perspective of support and resistance, it looks like some of the traders have gotten out and now the investors are getting in.  

While this still has room to run I might be inclined to take profits around 9:45-10:30AM on Friday as the Level 2 shows weakening support, or at my planned 5% level ($9.27) - which ever comes first.  If it makes a higher high before 11:00 then it might be considered for another day's hold, but as soon as it makes a lower high by 11:00AM on any given trading day after Friday, profits should be taken.  If it holds support above half the body of the prior day's candle then I might consider getting back in for at least an overnight hold.  This would likely be a 3:30-4:00 decision based on the volumes and their implied direction (support or resistance).

For this trade, if I would have made my market buy at the open I would have likely gotten my 1,000 shares at $8.83 - $8.85 per share based on the volumes transacted at that time. Today, SGI bounced off that $9.27 (5% over the $8.83 assumed purchase) as the high of the day.  This represents a $440 gain minus any fees paid for the round trip.

If one were inclined to look at SGI as a longer term trade, the weekly chart shows this week as having a distinctly higher high and higher low, a good indicator of a longer term trade forming.  The MACD, while having not crossed yet, is curling in that direction.  Until that happens, and until SGI breaks above $9.94/share, this should be watched closely, regarded as a trade only, and any earnings reports should be carefully considered before holding large positions going into them.  SGI has had a history of under-performing.

That said, a longer term trade might have, based on the weekly chart for the last year - shown above), 9.64 & 9.94 as price targets.  If SGI breaks 9.94 then it could see as high $11-$12 as it fills in the gap from the precipitous drop it had earlier this year.  That drop mimicked the drop from the middle of 2014 when SGI missed its numbers and triggered a sell-off.

If you like the products of Silicon Graphics, like I do, then they are a company to watch and buy on the big dips.  they have a history of ground-breaking innovation in the domain of high performance graphics computing and engineering.

Week of 4/6/2015 - Pick and Update

SGI Paper Trade for 3/6/2015

My pick for this week was SGI.  I'll update the performance later, but thus far it's up but not as far as I was expecting.

I could have bought 1,000 shares around the open at roughly $8.80/share.  Currently, now Wednesday afternoon, this is dancing around $9.00 but peaked yesterday at 9.12.  So far this looks like it would have made a good overnight hold, but I'm not as happy with it as a week-long hold.

I'm still refining my methods of finding these opportunities.  The overall market can also affect stocks like these (technology), so that may also be contributing to what I'm seeing.

Week of 3/30/2015 - Thursday Roundup

JIVE Paper Trade Update - Day 4

JIVE opened at 5.21, popped to 5.31, and then spent pretty much the rest of the day fighting between 5.18 and 5.19 until it closed the trading session at 5.17.  The end of the day saw a little panic-selling, but there is a LOT of resistance at 5.19.

Today saw a higher high and a higher low, and the Holiday may have had as much to do with the panic selling in the last few minutes before the bell.  Someone placed a 5.24 bet after hours, undoubtedly hoping it might spur more enthusiasm come Monday.

JIVE
               Open        Close       High        Low
Monday:        5.20        5.13        5.27        5.11
Tuesday:       5.09        5.13        5.25        5.04
Wednesday:     5.11        5.19        5.21        5.05
Thursday:      5.21        5.17        5.31        5.16

If I were trading this with real money I would be looking for the exit come Monday morning.  The reasoning for this is the principle of "Up-or-Out."

When trading stocks, if a stock doesn't behave as expected, then we get out.  Our efforts are designed to capture a reasonably close time for a breakout and a miss on the breakout means it is more likely to fall and hurt our assets.  Frankly, I prefer to NOT have my assets hurting.

LESSONS LEARNED:

1) When Starting the week, don't just buy the opening price, watch for a drop and for support to come in, that's the point to strike.  I could have comfortably entered the paper trade on Monday or even Tuesday at 5.10 or 5.11 and made a few dollars on the trade in the end, even considering the trade fees.

2) Set a trailing stop so that if the trade goes wrong, then you don't lose your assets in it.  Try to trade  stocks that are of high enough quality that your broker will allow a trailing stop.  E*Trade will not let traders set stops (hard or trailing) for stocks on the OTC market.  Only exchange-traded securities (e.g. NYSE, NASDAQ) can have stop orders.

So, next week we'll look for some new opportunities.  I'm eyeing MCP and TC for now, but I'll publish a Sunday post with my watch list for next week.  My updates will be shorter in the future. and my weekly roundups will start to include weekly data of past watch-list stocks because I want to evaluate the value of looking at weekly and monthly charts for their MACD, accumulation and other indicators.

Week of 3/30/2015 - Wednesday Update

JIVE Paper Trade Update - Day 3

JIVE opened at 5.11 and closed at 5.19 on much lighter volume.  Seems people didn't want to panic-sell.  Hopefully, that's a good sign.  It peaked at 5.21 and initially dropped to 5.05.

As much as the highs of the day have dropped each day, the low ticked up a cent today over yesterday.  The high volume and accumulation at the end of the day (last 12 minutes) is encouraging.  So far this swing trade may take into next week or later to yield its gains, but it's looking like those gains will come.

JIVE
               Open        Close       High        Low
Monday:        5.20        5.13        5.27        5.11
Tuesday:       5.09        5.13        5.25        5.04
Wednesday:     5.11        5.19        5.21        5.05
Thursday: