Closing FRESX 5.95% profit in 34 days

This was a nicely timed 401K trade netting 5.95% while the overall market went up and down like a yoyo.

This stock is clearly in a slow downtrend, with several 5 - 15% swings evident in the last eight months.  Blue lines on the graph represent potential trend and cyclic structure of the swings. These could be because of dividend payments, I didn't take that into account - the analysis was purely technical. If I managed to get a dividend payment I'll chalk it up to dumb luck.

Buy signal was the bounce off my blue dashed lower trendline on the top graph. Purchase was right on the green 5-day EMA on the weekly chart. The daily chart for these funds has two much chatter going on, but the weekly chart clearly shows the cyclic trends. This fund charges a short term trading redemption fee if the duration is less that 90 days (i.e. 12 bars on the graph), so I had to pay 0.75% to exit where I did. This was worth it considering the cyclic nature of the chart.

The red bars did not penetrate the lower bollinger band, indicating the downtrend was not too dramatic and dangerous. Often the penetration of red candles in the lower bollinger band can signal and accelerating downtrend.

MAC-D was below the line, with a series of red bars diminishing in size, showing the downtrend and slowed and was reversing, and a classic technical trading pattern of the MAC-D cross about to occur. The blue and yellow averages form a closing triangle, signaling an optimum buy point prior to the MAC-D cross.

RSI for the buy point was a little late - already at 45. Optimum entry point when you are trading based on RSI would been down at 10, but this stock turned around before then. And RSI way down at ten could be in a severe downtrend, so caution is required using that indicator alone.

Exit was conservative at $0.35 short of my target exit price. I could have let it run a little further, but the RSI was already 90 on the bottom graph, signaling that the stock is close to a reversal.

Overall market conditions of bullish in a bear market meant that the conservative exit taking 5.95% profit in 34 days was quite good. A buy and hold investor buying this fund in June last year (assuming by luck they bought at the low) would have made the same return in 8 months as this technical trade did in 34 days. A periodic investor in a 401K investing monthly would have probably ended up with a small profit, as the buy points would have varied, with some profitable and others not.

FRESX overbought - Closing Long Position

Closing FRESX long position for similar technical reasons as VGSIX.

6.4% profit over 73 trading days. Zero commission if you have an account with Fidelity

Technical Sell Signals were similar to VGSIX

• Bollinger band - penetrated by green candles three times - sell signal
• MACD-5 line (blue) is way above the volume bars - sell signal
• RSI-5 above 90 - sell signal

RSI on the monthly chart is at 87, which indicates I could hang on longer to squeeze more out of this rally, but I'd rather take the profit. This trade is in my 401K account, where my emphasis on seeing the account balance go up every month and taking profits when they present themselves, rather than watching the balance go up and down with the market. 

Of the last 18  trades in my 401K, 17 were profitable, so the strategy of taking profits seems to be working. Better than the usual 'buy and hope' investing that is encouraged in retirements accounts.

If a 'buy and hope' investor had bought FRESX in 2008, around 5 years ago, they would have made around 6.4% profit over 5 years. They would have seen their investment be at a loss for around 90% of that time. If they'd had the courage to hold to the market bottom in 2009, they would have seen their investment lose 70% of its value within the space of a year, before recovering over the course of the following 4 years. 

Through use of technical analysis, this trade made 6.4% profit in under 3 months.