Update – LPI Buy Setup

I know I have not posted in a while, I have taken a rather long hiatus from this blog for many reasons.  I have just finished high school not that long ago and I have been working long hours at work this summer.  I will be off to the University of Delaware this fall and I hope to continue to post on this blog.

I have been currently looking at a new stock play and I have come across Laredo Petroleum (LPI) as a possible buy.  There is a short-term downward channel within a long-term upward channel, and the price of the stock is approaching the bottom of the short-term channel.  The price is also approaching the 200 day moving average, and the Stochastic is approaching oversold levels as well, setting up a great entry point at the low 28 levels to high 27 levels.  I will wait and watch for now but I see this stock having a strong move to the upside in the next few weeks.  

Market Update

The overall market was very flat today with the Dow Jones showing a slight loss of -0.07%, while the S&P 500 and the Nasdaq both saw an increase up until the market close.  Both the S&P 500 and the Nasdaq finished the day with slight gains.

One stock that I am watching closely is Arcos Dorados (ARCO).  This company is the chief operator of McDonald’s restaurants in Latin America.  What I like about this stock is that the technical’s on the stock look promising.  The share price has just eclipsed the 50 day moving average and the daily volume is seeing a 69.4% increase compared to its typical one day volume of 959.2K.  After Monday’s close I set a watch target for 9.59 as a close above that mark would indicate a bullish pattern.  Sure enough, by the close of the market on Tuesday, the share price had risen above that 9.59 level and is currently priced at 9.82 at the end of Wednesday’s trading day.  The upcoming World Cup in Brazil should be beneficial to the company as they have 812 restaurants open in Brazil, amounting to about one-third of their portfolio.  Currently the economy in Brazil is less than desirable however, as the Brazilian currency, the Real, saw an 11% decline in the fourth quarter.  Nevertheless, the Brazilian economy should see some growth with the World Cup and it could work out well for ARCO.

Week Analysis

With this post I wanted to analyze how the stocks on my watchlist performed.  I will then try to go more in-depth into why they maybe performed better or worse than I had predicted.  

1. Central European Media Enterprises (CETV)

     Position: Short

     Open price on Monday: 4.19

     Close price on Friday: 4.00

     % Change: (-4.53%)

          This stock performed exactly as I predicted it would.  The share price made a strong 74.91% increase the Friday before I put it on my watchlist, and I thought that an increase of that magnitude could not be supported.  I was right, the strong move upward could not be supported and the share price even made it as low as 3.85 during the day on Thursday.

2. Microvision (MVIS)

     Position: Short

     Open price on Monday: 2.02

     Close price on Friday: 2.23

     % Change: (+10.40%)

          This stock performed drastically different then I thought it would perform.  I have been tracking this stock for a while and I spotted the stock after it made a large one day gain back on February 20th.  At that moment I had predicted that the share price would fall from that mark of 2.67 (would later go as far up as 3.38), and it did.  However, when I included it in my watchlist for this blog, the share price proceeded to increase.  Regardless of the performance this week, I still am quite bearish about the stock.  

3. Ambac Financial Group (AMBC)

     Position: Short

     Open price on Monday: 34.80

     Close price on Friday: 34.47

     % Change: (-0.95%)

          This stock performed well, in that the price decreased throughout the week.  The price even reached a low of 32.01 during Tuesday’s trading day.  Although a 3.40% gain is nothing to right home about, it was still a good play for the duration of a week.  

4. American Express (AXP)

     Position: Short

     Open price on Monday: 90.60

     Close price on Friday: 93.86

     % Change (+3.60%)

          This stock performed a lot better than I thought it would this week, as I had thought it would have a bit of a pull-back before increasing again.  I had said that I was bullish on the stock for the remainder of the year, but was just expecting a slight pull-back in the near future.  That pull-back never came and the share price proceeded to increase throughout the week. 

5. Kadant (KAI)

     Position: Short

     Open price on Monday: 39.90

     Close price on Friday: 40.07

     % Change: (+0.43%)

          This stock performed fairly neutral throughout the trading week as the stock only moved a meager 0.42% during the course of a week.  I am still staying firm with my bearish call on this stock as I am sure it will witness a pull-back in the near future.  The stock is still in the overbought territory and it is due for a correction.

6. Market Vectors Gold Miners (GDX)

     Position: Short

     Open price on Monday: 26.67

     Close price on Friday: 26.18

     % Change: (-1.84%)

          This ETF performed as I had thought, although I had originally thought that the price would move lower than it had over the course of the week.  I believe that the price will continue to move lower, but once it reaches the $21 or $22 range, I would label it as a buy as it has a lot of upside potential.  

7. Synageve Biopharma (GEVA)

     Position: Short

     Open price on Monday: 113.54

     Close price on Friday: 98.44

     % Change: (-13.30%)

          This stock performed beautifully, as I had said earlier in the week that the company had a poor earnings performance, and that the earnings were due to come out on Monday.  The stock continued to move lower throughout the course of the week and the sentiment was absolutely bearish.  

8. Ares Capital (ARCC)

     Position: Long 

     Open price on Monday: 17.97

     Close price on Friday: 17.83

     % Change: (-0.78%)

          This stock was a very stable one throughout the week as the share price hardly moved.  Earlier in the week I had said that I would like to see the stock move toward the 17.70 range, as it then would hit the bottom of its channel that it was following.  After hitting this range, the share price would then be able to increase to the upper bound of the channel, above the 18.00 range.  I am still bullish on this stock.

9. Avon Products (AVP)

     Position: Long

     Open price on Monday: 15.30

     Close price on Friday: 15.17

     % Change: (-0.85%)

          This stock surprised me a little, as I was sure that it would increase throughout the week.  However, taking this slip in prices, I think it is even more of a buy now as it is coming close to the support line of about 14.00.  If it does approach this 14 range, the stock will most likely rebound off of this line and increase toward the upper teens.  I am still quite bullish on this stock as I believe it will come to test the $20 range later this year. 

10. Guidwire Software (GWRE)

     Position: Long

     Open price on Monday: 52.92

     Close price on Friday: 54.54

     % Change: (+3.06%)

          This stock performed as I had thought it would, with a steady increase over the course of the week. I mentioned that the company had a great track record when it came to earnings reports, and this was no different.  The earnings came out at the close of the market on Monday, and when the stock opened on Tuesday the stock was already up nearly $3 from the close on Monday.  

Stay tuned for my next wachlist coming out tomorrow!

Market Update

The market made a strong move to the upside today after Ukraine-Russia tensions were said to be easing.  Personally, I do not know what people are thinking when they say that the tensions are easing.  Putin is still a threat and it doesn’t appear that he is backing off when Russian troops are still stationed in Crimea.

Anyhow, the Dow Jones Industrial Average showed strong upward momentum with a 227.85 (+1.41%) increase; the Nasdaq also showed strong gains as it was up 74.67 (+1.75%); and once again the S&P 500 ended at a new record high, up 28.18 (+1.53%).

Over the past few days I have been looking for stocks that are top gainers for the day, and with these I have been trying to find discernible stock patterns that signal why they increased so much in one day.  One such stock is ROSG.  This stock shot up +26.5% today, March 4, and I wanted to dive in and find out how one could have predicted such an increase.

Although not many people can truly predict such an increase, there are ways to identify a bullish momentum that can help you to initiate a trade. In the chart of ROSG below, you can see that I drew a few lines.  The horizontal line that I drew indicates a sort of resistance price, where the stock had a tough time breaking out above.  This price was in the 3.9 range, and since mid-June it only came close to that line twice – in early January, 2014, and February.  What I indicated with the other two lines was an upward channel.  An upward channel is a strong indicator of a bullish trend that is gaining momentum.  In mid-February, the stock price finally broke above the 3.9 range and was still within the upward channel.  At this point, one can say with confidence that the price will continue its bullish momentum, and is a definite buy.

In the future I will be publishing information about other chart patterns that indicate both bullish and bearish trends.  Stay tuned for more!