Made some but missed out on few

Good morning,

It was a good start to the New Year so the market surging to new 52 weeks high with the volume picking up after most traders and money managers are backed from the long holidays. Report from ISM which exceeded expectation helped pushed the Dow up 1.5% to close at 10,583.96. However, after the initial surge, sideway trading dominated the whole trading session and the market closed the session with solid gains.

There was an important lesson for me yesterday as I see the market surged and I missed out on the solid gains of the few stocks selected by KUTE for its fundamentals. I have forgotten that technical are tools for me to understand the current market participants’ behavior and not tools for accurate predictions. I should have known that candles can paint a better picture if the volume is large since we need the large number of participants to understand the trading moods. In fact I have questioned the reliability of reading the candlestick formation in my blog yesterday because of the low volume of trades over the holiday sessions. Well, looking at the positives, I should be glad that if the candles had shown bullish upswings and the markets declined, I would have incurred losses. At least I didn’t lose, except for the opportunities lost. I will be looking at the trade volume from now to verify and confirm the formation of the candles. That is why stock trading is great. Much better than mahjong, because it keeps me my mind sharp as I constantly explore ways to be more accurate in stock trading and there’s so much I can learn daily as I trades.

NOV was impressive last night and my limit order was done last night, making me good profits again. The stock closed 4.54% at $46.09. I am sure my students have made money from this stock again. Perhaps they can buy me wine now, with the excess profits after deducting their seminar fees (smile).

PDE closed the session with 2.73% gain at $32.78. I have bought one position at $32.45 and another at $32.66 last night. PTI gained 1.17% to close at $20.69 and this position is also in the money. NE was up 3.73% to close at $42.22, DSX gained an impressive 5.73% to close at $15.31 and CAB closed the session at $14.85, up 4.14%.

Have a great day!

Francies Cheng
BBus MAppliedFinance