Tuesday, December 28, 2004

Holiday journal updates

Kevin Pickell, a friend of mine has started a trading journal blog, so it will be fun to follow along with Kevin's commentary and trades. Bill Cara is also back up with a new blog and website. Both of these blogs will show up on my blogroll links soon.

I started getting long yesterday, entering positions in TZOO and TASR. I followed up today with positions in GOAM and CAAS, but stopped out of CAAS. Recently I have been trying to buy higher lows near important technical areas instead of buying breakouts because breakouts frequently roll over by the time you can get into them. For example, I was watching GOAM trade at $9.50 this morning waiting for the shares to drop about $0.10 so I could pick some up near $9.40. The low for the day was $9.30, and also a long-term support area. If I could buy at $9.40, it would be a cinch to know where to put my stop-loss, and I could have it close to my entry. Keep in mind that I have been stalking GOAM for weeks. I got up to go to the bathroom, and when I got back to my desk the stock had gained $1.00. I bought the breakout and got a fill at $10.33, which I don't think was a bad move, but the problem is that it isn't so clear where to put the stop-loss anymore. I don't want to get shaken out on a normal correction, and I also don't want to get stopped out right before the stock finds support and takes off again (if I were sitting out, I might be a buyer there). I don't want to risk very much either. I don't like holding a stock when it is going down because you don't know how far it will fall, so a stop-loss works much better for me than trying to say "OK, this thing has HAD IT! IM DUMPING". Doesn't work. So I can't put my stop near $9 like I wanted to. Instead, it is closer to $10.

NGPS has been the star performer on my watch list lately, but I didn't catch any of the move. I haven't planned to buy NGPS because it hasn't had a correction in months! The stock has literally gone straight up. After NGPS corrects, I will be watching closely for a low-risk entry point. A friend of mine has been in it since $26, which is also where I would have bought it if I wasn't already loaded up with AAPL, SYNA, NVDA, GOOG, and a few others at the time.

Ironically enough, I received a Motely Fool investment book as a Christmas gift. I know I was bashing the Fool a week or two ago, but it will be interesting to read more about their stock picking strategy. I try to keep a very open mind, its the best part of being fickle.

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