The first long trade was 3% profit in 4 days, the second 6% in one day, thanks to yesterdays crash. This is the daily chart.
Showing posts with label AREX. Show all posts
Showing posts with label AREX. Show all posts
September 23, 2011
AREX taking profits on the way up, and down
AREX is one of my favorite stocks at the moment, as it has nice clear movements up and down. I'm not getting the timing right though - could have made double the profit on both directions on these trades.
The first long trade was 3% profit in 4 days, the second 6% in one day, thanks to yesterdays crash. This is the daily chart.
The first long trade was 3% profit in 4 days, the second 6% in one day, thanks to yesterdays crash. This is the daily chart.
August 15, 2011
Missed the boat big time on my AREX bounce trade
Sometimes, it's hard to decide whether you are smart or an idiot. Looking at this chart, in hindsight, this exit from AREX looks insane. Technically, the setup looks perfect for a bounce. I nailed the bounce entry point, took a day or two of a beating, then it looked like a recovery was starting. This trade made 4.63% in 2 days in wildly swinging markets which is not bad, but it missed out on a 25% profit in 4 days if I had stayed in for the ride
Here is why I exited. This is the 5 minute chart from the morning I decided maybe the market was turning to the downside, not the upside. The last bar shown below is where I decided the market was going down, not up. In hindsight, waiting 15 more minutes would have shown me that the trend was upwards again. But 15 minutes in last weeks market could have also erased the entire trade profit from two days in the most volatile and unpredictable market since 2008. The 75 cent swing in the first hour of trading on a $17 stock was really scary, and AREX is a twictchy, unpredictable stock at the best of times. I took my 4.5% and ran, thereby missing a 25% profit in the following three days.
Here is why I exited. This is the 5 minute chart from the morning I decided maybe the market was turning to the downside, not the upside. The last bar shown below is where I decided the market was going down, not up. In hindsight, waiting 15 more minutes would have shown me that the trend was upwards again. But 15 minutes in last weeks market could have also erased the entire trade profit from two days in the most volatile and unpredictable market since 2008. The 75 cent swing in the first hour of trading on a $17 stock was really scary, and AREX is a twictchy, unpredictable stock at the best of times. I took my 4.5% and ran, thereby missing a 25% profit in the following three days.
April 4, 2011
AREX Sold at $32.87 4.5% profit in 2 days
Entered this trade just on Friday, after it dropped back over 6%. I didn't think the large drop was warranted as AREX has been in a solid uptrend since September. So I entered on Friday late afternoon, with my price target being $34.90 in 10 trading days
Nice surprise to find by midday it had made up most of the loss, and at that price, was performing twice the daily profit than my target, so I sold based on a limit order at $32.87. This was designed to cash in on the mornings quick movement and bank the profit. AREX does appear to be becoming increasingly volatile, so I'm inclined to take quick wins but get in again if the trend does appear to be sustainable.
Notice the daily candles. The big red candle on Friday following the is a bearish engulfing reversing pattern. The same red candle penetrated the upper bollinger band, creating tension that resulted in the sharp plunge downward. Look at the previous time a big red candle opened above the bollinger band on March 7. The price went straight down and through the EMA in a single day. Because there was no upwards momentum, things went downhill - admittedly with help from the rest of the market. Yesterday I judged that there still was enough momentum in the upwards trend to see a bounce.
Todays green candle shows selling pressure to the downside, with the close barely above the open. I think today I was lucky with the bounce, and might will stay away from AREX until the volatility calms down a little.
It could even be developing into a classic double top pattern, which could even indicate opportunities to short this stock will come along. However with the price of gas at the pump going up every week all spring and summer long, just like in the summer of 2008, it could be that AREX just keeps on climbing.
Nice surprise to find by midday it had made up most of the loss, and at that price, was performing twice the daily profit than my target, so I sold based on a limit order at $32.87. This was designed to cash in on the mornings quick movement and bank the profit. AREX does appear to be becoming increasingly volatile, so I'm inclined to take quick wins but get in again if the trend does appear to be sustainable.
Notice the daily candles. The big red candle on Friday following the is a bearish engulfing reversing pattern. The same red candle penetrated the upper bollinger band, creating tension that resulted in the sharp plunge downward. Look at the previous time a big red candle opened above the bollinger band on March 7. The price went straight down and through the EMA in a single day. Because there was no upwards momentum, things went downhill - admittedly with help from the rest of the market. Yesterday I judged that there still was enough momentum in the upwards trend to see a bounce.
Todays green candle shows selling pressure to the downside, with the close barely above the open. I think today I was lucky with the bounce, and might will stay away from AREX until the volatility calms down a little.
It could even be developing into a classic double top pattern, which could even indicate opportunities to short this stock will come along. However with the price of gas at the pump going up every week all spring and summer long, just like in the summer of 2008, it could be that AREX just keeps on climbing.
April 1, 2011
AREX Back in long after it dropped 6% today
I didn't think AREX would provide a rentry point so soon, but after the wild jump this morning to $34.93, and then a 6% drop this afternoon, I'm back in long around about the level of the bottom of the channel that the current rally has been staying within.
Gained 1.5% within 10 minutes of getting in. I could day-trade it now and pay my electricity bill for the month, but I think it will track to it's long term trend and go back to the top of the channel in the next weeks.
Gained 1.5% within 10 minutes of getting in. I could day-trade it now and pay my electricity bill for the month, but I think it will track to it's long term trend and go back to the top of the channel in the next weeks.
March 31, 2011
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.
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.
February 18, 2011
AREX Sold at $33 16% profit in 3 trading days
16% profit in 3 days, from the entry on the 14th. Trading is like going to the casino. The gamblers mentality means you stay in the trade, always thinking the next day that the trend will keep going.
I exited this trade because there were three clear sell signals.
1. I beat my goal of 1% per trading day profit.
2. Price jumped out of the channel. AREX has been trading within a channel for months. Every time it breaks out, it comes back in quite quickly, giving us another buying opportunity.
3. Today's open and close were above the bollinger band. While this could also signal a huge breakout, I'm interpreting this as tension that will bring the price back to the average. Because of point 1 & 2, taking profit is better than hoping the breakout will occur.
You could argue that AREX is in a long term trend and this should be more of a buy and hold. However, I have XTEX for that, because it pays a dividend and is in an uptrend, I'm happy to stay in XTEX for the 6% dividend, and 6% capital gain in the last month.
I'll be looking for another rentry point again on AREX because the middle-east uncertainty is increasing, and that is making people look at the horizontal drilling, hydro-fraccing and rediscover of oil reserves here in the USA.
I exited this trade because there were three clear sell signals.
1. I beat my goal of 1% per trading day profit.
2. Price jumped out of the channel. AREX has been trading within a channel for months. Every time it breaks out, it comes back in quite quickly, giving us another buying opportunity.
3. Today's open and close were above the bollinger band. While this could also signal a huge breakout, I'm interpreting this as tension that will bring the price back to the average. Because of point 1 & 2, taking profit is better than hoping the breakout will occur.
Trade the reality not the desire.
Cash in the bank is better than hold and hope
I'll be looking for another rentry point again on AREX because the middle-east uncertainty is increasing, and that is making people look at the horizontal drilling, hydro-fraccing and rediscover of oil reserves here in the USA.
February 14, 2011
AREX Long at $28.42 (re-entry)
Re-entered Approach Resources (AREX) today as its rest seems to be over and AREX will hopefully contine it's climb. You do have to wonder when this rally will peak. If you look at the monthly chart compared with the daily chart you can see what I mean - there is probably resistance at the mid-2008 high of $30. So I'm being very careful to see what will happen. Gas prices were $4 during summer of 2008, so using my simplistic logic, maybe AREX and prices will continue to climb throughout spring and then then world will end (again).
XTEX dividend paid 0.26c, and up 6% in 3 weeks
Both my current oil and gas plays are doing well. Crosstex Energy (XTEX) paid 26c dividend which gives it around 6.4% yeild at the current price. It's also up 6% from when I bought 3 weeks ago. I wrote on 1/26 when I bought this stock that I was worried about my entry point not being optimal, as it was above the upper bollinger band. The stretching of the bollinger band did pull the price back down for a day, but then the trend just continued like nothing had happened.
It's quite possible there might be another pullback tomorrow after todays sprint. Interestingly, the payout of the dividend didn't slow the stock down, as is sometimes visible with these types of limited partnerships.
This is a long term hold for dividend income and capital gain with a price target of $30 within 12 months, as there is an long term plateau within the $30 - $40 range. There is no reason why it shouldn't get there, as gas extracted from all the Texas fraccing oil plays comes on stream and these reservers are increasingly understood to be a critical part of US energy security given insatiable Chinese demand for gas reserves globally.
Re-entered the my Texas Oil and Gas play AREX today as it looks like it has finished it's bench and will continue it's long term rally.
It's quite possible there might be another pullback tomorrow after todays sprint. Interestingly, the payout of the dividend didn't slow the stock down, as is sometimes visible with these types of limited partnerships.
This is a long term hold for dividend income and capital gain with a price target of $30 within 12 months, as there is an long term plateau within the $30 - $40 range. There is no reason why it shouldn't get there, as gas extracted from all the Texas fraccing oil plays comes on stream and these reservers are increasingly understood to be a critical part of US energy security given insatiable Chinese demand for gas reserves globally.
Re-entered the my Texas Oil and Gas play AREX today as it looks like it has finished it's bench and will continue it's long term rally.
February 2, 2011
AREX Sold at $28 11% profit in 11 trading days
Sold AREX at planned profit target of $28. Although still in an uptrend, this trade met my profit target of 1% profit per trading day (11% in 11 days) for any individual trade.
Note how the candles were 'surfing up' the upper Bollinger band (light pink line on the graph). I think of Bollinger bands as rubber bands. The trade price stretches the rubber band either above or below the overall direction of the trend. The more the Bollinger band 'stretches' away from the longer-term trend (green and red moving averages, or the red line I drew in), the faster will be the correction back to the average trend.
In this trade, I was more focused on putting cash in the bank, rather than holding and hoping that it would continue to penetrate above the Bollinger band. 11% in 11 trading days is a pretty good profit, so I felt good about taking the cash off the table, even in a stock that is still in a uptrend. In my mind, it's a bit like taking your chips off the table at the casino while you are ahead, in order to stop you gambling bigger and blowing up your stake. Its a risk/reward balancing act. Given that my entire portfolio is up 2% in just first two days of February, I'm inclined to like having the cash in the bank to give my month a good solid start.
The trend in AREX is however way too good to ignore. What I'll now be looking for is a pull-back where the candles cross the red trend line I drew on the graph. I'm pretty confident that the overall rising price of oil, and the overall rising market will cause AREX to continue to rise. So I put the order in already to buy at the point on this line where I estimated the pullback will go back to (+200 LMT icon on the graph).
Plan your trade, and trade your plan
Note how the candles were 'surfing up' the upper Bollinger band (light pink line on the graph). I think of Bollinger bands as rubber bands. The trade price stretches the rubber band either above or below the overall direction of the trend. The more the Bollinger band 'stretches' away from the longer-term trend (green and red moving averages, or the red line I drew in), the faster will be the correction back to the average trend.
In this trade, I was more focused on putting cash in the bank, rather than holding and hoping that it would continue to penetrate above the Bollinger band. 11% in 11 trading days is a pretty good profit, so I felt good about taking the cash off the table, even in a stock that is still in a uptrend. In my mind, it's a bit like taking your chips off the table at the casino while you are ahead, in order to stop you gambling bigger and blowing up your stake. Its a risk/reward balancing act. Given that my entire portfolio is up 2% in just first two days of February, I'm inclined to like having the cash in the bank to give my month a good solid start.
Cash in the bank is always better than hold and hope.
The trend in AREX is however way too good to ignore. What I'll now be looking for is a pull-back where the candles cross the red trend line I drew on the graph. I'm pretty confident that the overall rising price of oil, and the overall rising market will cause AREX to continue to rise. So I put the order in already to buy at the point on this line where I estimated the pullback will go back to (+200 LMT icon on the graph).
January 26, 2011
AREX Long at $25 - Trade the trend
The 4 month trend says it all. Notwithstanding the trend, when we pay $3 at the pump, it's time to buy gas and oil stocks. I'm looking at XTEX as well for my income portfolio as they pay a $0.26 dividend in Feb to shareholders on record 1/31.
Great recovery day
Some days you wish you had just bought all of these yesterday...
Most of these I mistimed and bought on Monday before they all dropped 4-6% on some weak big corporate earnings reports. However after todays excitement things are looking positive again and I think these stocks all have lots of upside.
FACE I should have sold all when the volume was higher and I took the 5% 1 day gain. It's so thinly traded its more like gambling.
Most of these I mistimed and bought on Monday before they all dropped 4-6% on some weak big corporate earnings reports. However after todays excitement things are looking positive again and I think these stocks all have lots of upside.
FACE I should have sold all when the volume was higher and I took the 5% 1 day gain. It's so thinly traded its more like gambling.
XTEX Long at 15.24 in time for Jan 31 dividend
This is not the ideal technical entry point in CrossTex Energy LP (XTEX), as my long entry at $15.24 was above the upper bollinger band. However I wanted to ensure I got the 26c dividend payable to shareholders of record on January 31.
XTEX runs gas pipelines across Texas, where there is a lot of activity drilling new wells to extract oil using new methods. They've been in a huge uptrend ever since being hugely sold off at the end of 2008.
The monthly chart is very similar to AREX. XTEX is my longer term dividend and capital gain play. Target $30 in 12 months. AREX for shorter term trades, but both show huge potential, if oil prices keep rising and middle east democracy movements mean increased uncertainty regarding US energy interests.
XTEX runs gas pipelines across Texas, where there is a lot of activity drilling new wells to extract oil using new methods. They've been in a huge uptrend ever since being hugely sold off at the end of 2008.
The monthly chart is very similar to AREX. XTEX is my longer term dividend and capital gain play. Target $30 in 12 months. AREX for shorter term trades, but both show huge potential, if oil prices keep rising and middle east democracy movements mean increased uncertainty regarding US energy interests.
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