AREX closing long position at $33.67 5% profit in 19 trading days

Closing out third profitable AREX trade with 5% profit in 19 trading days. I bought this just before it dropped on the bad economic news earlier in the month. So most of March I was sitting on a loss. It turned around in the last few days, and is trading since three days in profit.

The graph below shows all three AREX profitable trades made within the overall uptrend. Notice how RSI (7 period interval,90 upper line,10 lower line) acts as a good indicator of the open and close points. In an long term uptrend like this, RSI of over 90 indicates an almost certain pullback. I used this to time both the first and second sell points, when RSI peaked at 91 and 93. If you are still in a trade with RSI of 93, you're not taking profits off the table quickly enough, and you are likely to see gains evaporate. With $9 commissions to get in an out, why lose money you have already made?

The third trade I didn't know there was going to be a magnitude 9 earthquake in Japan, which sent stocks for a spin. If I had been more on the ball, I would have just taken the quick 1 day profit when it briefly hit $34. I was just happy to get out of the trade today with a profit. RSI was only 79, so it could still run up for 2-5 days more before cooling off. To be honest, I wanted to end the month strong.

Not bad for a month when the S&P essentially made no net gain for the month. I did make losses closing out YONG, ARMH and NVEC positions as the market dived on the Japan news, but other trades closed during the rally (including the short FACE trade against the strong rally in the last two weeks), made up for the losses and allow me to close the month with a profit. As I analyse my performance each month based on the trades closed in the calendar month, I wanted to feel good about the month and have the profit in the bank.

FACE Bought to Cover @ $4.80 5% profit in 5 days

Closed FACE short position with 5% profit in 5 days. FACE still looks oversold, but this trade hit the target of 1% profit per trading day, so I'm not being greedy and closing it out. As you can see from the chart, FACE either jumps around wildly or does almost nothing, so take my philosophy is to put the profit in the bank before it makes another wild jump in the wrong direction. This stock is very lightly traded so even though these quick gains are possible, trying to trade more than 1000 shares at a time is going to mean fills are uncertain.

This is the third FACE trade I've made which made 5% in 5 days.  All three are shown on the graph below.

5% in five days - closed today
5% long day trade - Jan 3
5% short day trade - March 3

In hindsight a buy an hold with an opening price of $3.55 and a sell at $5 would have had a profit of 40% in two weeks.  But on a small, thinly traded and insanely volatile stock like FACE, the psychology of how much profit to take and when to take it would have driven me crazy. Plus there was no real indication of a sustainable uptrend in this chart.  I prefer the control of timing moves in one direction and banking the profit immediately.

UNTD sell at $6.32 - 3% profit in 4 days

A modest gain on this short term swing trade, entered last week. 3% profit in 4 days from entry on the 23rd. Volume is dropping off and the trend looks weak and uncertain. Additional technical indicators that I don't trust this trend: trading on the upper Bollinger band (I interpret this as tension to the downside will pull the stock down quickly and without warning). Plus an RSI of 84. An RSI over 80 is one of my 'possibly sell' signals. An RSI of over 90 is 'you are crazy not to sell".

What I suspect may happen here is a rest or minor drop back, which might give another re-entry point. For the  long term goal of this stock, which was a price target of $7.25 over 4-6 weeks.

FACE Short at $5.03

Another opportunity to short FACE today. Yesterday there was a huge rally, taking it above of the bollinger band (not shown in the graph below)) and way out of the channel on the FinViz chart.  I don't believe this is start of a bigger rally for FACE, so even if there is a longer term rally happening, this trade still has a good potential to make some money within a short time frame when the stock corrects down to a more reasonable price level within the channel. I think this trade is more likely to follow the pattern of my previous FACE short sale on March 3.

 Target  between $4.60 and $4.20, over next 5 days.

UNTD buy at $6.10

This UNTD trade is based on the article here on Street Authority, which I regard as a reasonably 'hype-free' publication.

Technicals look good, with not only a dividend, but parabolic SAR showing support, EMAs flat indicating the recent sellers have tailed off. Downside risk is that that it completely breaks out downwards towards last the low of last August in the $5 range.

Target price is $7.25 over 4-6 weeks, although because of the dividend, you could feel comfortable holding this stock longer term. My buy price was just about the level the candles penetrated the lower bollinger band. Everything indicates a solid base from which to rally.

AGNC past dividend paydate - BUY opportunity

AGNC is post dividend. Why would this make it a buying opportunity? The great thing about AGNC is the huge dividend - $1.40 per share every quarter - nearly 20% p/a. The bad thing about AGNC is the stock goes down by at least the amount of the dividend every time the payout is announced. You can't pay out that much money to investors without it being reflected in the stock valuation.

However,  when the dividend is announced, the stock gets hammered down usually by even more than the  $1.40 per share that is paid out. This is the market over-reacting to the big payout. This is where the opportunity lies.

For the attentive trader, this gives us the opportunity to get in and out of AGNC during it's dividend cycle, and actually make more profit per share than the dividend pays out.

Action to Take: Buy AGNC at $28 or below, during the next 3-4 days, before it starts to climb again.

Put in an automated sell to sell at $30, or an alert so you are notified when it reaches $30 and you can bank more profit than even a 20% dividend pays out. If we are lucky, we might make around $2 a share within the next 6 weeks.

If you don't think this strategy will work, just keep it for the dividend.

Uranium Picks

DDN Denision Miles Corp

CCJ Cameco Corp

Receommended: Read this article about Hydralic Fracking

The Last War We'll Fight on American Soil

By Keith Kohl | Friday, March 18th, 2011

While most people tend to look overseas to learn about the latest civil unrest, there's a battle raging in our own backyard.

Its outcome will have an impact on every single one of us.

For years, the potential of shale formations has significantly increased. Now, we've all heard about the massive shale basins in the United States. It's nearly impossible not to come across the success seen in North Dakota's oil industry.

The battle-lines are being drawn right now.

Yet oddly enough, the shale war isn't being fought over the actual oil and gas resources, but rather over how companies are producing it.

More important – and profitable, for some investors – is how the shale war will end.

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Shale Gas Explosion

It's difficult to dismiss 827 trillion cubic feet of natural gas; yet that's the amount located in the United States, according to early projections from the EIA's Annual Energy Outlook 2011.

In case you were wondering, it's 480 trillion cubic feet larger than their previous estimate.

When it comes to our natural gas, it's all about electrical power generation and industrial demand. Those two areas make up nearly 60% of our total consumption.

And we're fully expecting that demand to grow, too.

The EIA has made that part clear. Industrial demand is expected to increase to 9.4 trillion cubic feet in 2020. That's a 42% jump compared to the 6.6 trillion cubic feet the sector used in 2010.

You can tell the U.S. is gearing up for the next stage of its shale boom.

Within the next two decades, shale gas is expected to make up 45% of total production.

Can we ever expect that to happen without an end to the war over hydraulic fracturing?

The Fracturing War Rages On

Unfortunately, heated arguments in the hydraulic fracturing debate haven't eased in the slightest.

Both sides refuse to let-up.

As you know, hydraulic fracturing is the dominant method being used to extract oil and gas from those shale formations. The process involves injecting the geologic formation with fluid, 99% of which is composed of sand and water. The fluid fractures the rock, allowing the resource to flow freely. Sand or ceramic proppant is used to keep the fractures open.

By now, you probably realize most people don't take issue with the water or the sand part of the equation. Their problem is with less than 1% of the hydraulic fracturing fluid being used in the procedure. That cocktail of chemicals used by companies can be deadly if it gets into our drinking water.

And remember that only about 15-80% of the fluids injected into the well are recovered.

However, you should always step back and look at both sides of the fence before jumping on board.

Even the eye-catching documentary Gasland, which painted a gruesome picture of an industry laden with guilt concerning groundwater contamination, is not above scrutiny.

Flat Prices, Full Profits

Let's face it, any investor with a dime in the natural gas markets is painfully aware of how flat prices have been lately.

And the drilling activity has certainly shifted away from natural gas.

According to Baker Hughes' latest rig count, only 51% of active drilling rigs in North America are going after natural gas. The gap between those rigs drilling for natural gas and oil has narrowed considerably over the last few years. Then again, are we really surprised by that development?

After all, crude prices are once again above $100 per barrel. The price of Brent crude even topped $120 per barrel.

Yet despite the sub-$4/Mcf prices and an ever-present supply glut, my Energy and Capital readers are still smiling.

Why?

Over the last couple of months, we've seen several natural gas stocks refuse to give-up. Many of them are drilling in the heart of the hydraulic fracturing debate, too.

Take a look for yourself:

As you can see, some natural gas stocks are definitely worth a second look.

The Future is in Technology

If you can't beat 'em, join 'em.

Take careful note, dear reader, because that's how the hydraulic fracturing debate will end. We are well aware of our government's agonizingly slow pace.

However, the two sides might not be fighting much longer.

Recently, I was fortunate enough to catch one drilling company's latest earnings call. As it turns out, they may hold the fracturing technology that would put an end to the war, once and for all – particularly in the Marcellus formation.

You see, their alternative to hydraulic fracturing is turning some heads, and starting to attract a lot of attention from those Marcellus drillers. They've already made headway in the Canadian oil and gas markets.

Once this new technology takes hold in the massive U.S. shale basins, all bets are off.

Until next time,

Keith Kohl
Editor, Energy and Capital

FACE quick 5% 1 day profit

This is the second time in just over a month that FACE has presented the opportunity for a 5% day trade. The first one was a long trade on January 20

FACE tends to trade very low volume, with occasion wild 10-20% spikes or drops in price. If you can use these to your advantage there is money to be made for a small trader. There is almost no interest by institutional or larger investors in a stock like this, because it's such a small company. It's also 44% insider owned, so I suspect these wild swings are when one or another of the board or executive team wants some cash and dumps some shares. You can't use any stops, trailing stops or triggers on a stock this volatile or lightly traded. It's just taking advantage of a situation when it arises and getting in and out fast. I'm actually surprised they TDAmeritrade let me short the stock at all.

I had an alert set on FACE to trigger if the stock traded over $4.20.  By the time I spotted the email it was already trading at the days high of $4.49. Quick risk assessment and I was in short at $4.39. Ten minutes from seeing the alert to placing the trade.

2 hours and six minutes later I sold 50% of the position for a 5% profit. Target for the remaining 50% is down by the purple moving average over the next 5 days.

Here is the 5 minute chart to see more clearly how the days price action worked. This stock is so lightly traded that you can actually see my order as in individual bar on the graph - the only trade at that price within that time interval.

YONG Closed at small loss at $7.28

Closed out in a hurry after accelerating downtrend made itself apparent. Market is very jitttery this week.

 Buy point was too early. The three green candles in a row appeared to be the bottom of the trend. However a closer look at the steepness of the green and purple EMA lines should have told me the downtrend was not over. I had to be patient for 15 days to see some profit, and then should have exited when two daily candles quickly jumped above the upper bollinger band on Monday this week. Should have taken the 3% profit while I could and be grateful to get a profit at all. Then it turned and plummeted, and I got out with a small loss on the way down.

FACE sold short at $4.40

Trying to make money when this huge 1 day jump corrects downwards.

See the Closing Trade

ARMH Sold at $29.22. EMA crossing over signaling potential downtrend.

Too much technical risk here to stay in. Should have sold on Monday on the gap up. Didn't follow my own rule of taking profits if they meet or exceed 1% per trading day.