Low Risk Trade Ideas

Stocks I've been watching/trading that have been in a channel. Until it breaks, it works. Right now, they are at or near their low end of the channel.

Needless to say, it depends on the direction of the general market, which is increasingly dictated by the political development.


UCO (double-long crude oil ETF)

GBG (gold exploration)

AGU (fertilizer)

JASO (solar)


Do your own due dilligence.

Rally No One Believes Enters 11th Month

The rally no one has really believed in all along since March 2009 has now entered the 11th month, and it is showing the sign of further upside. I said here, here, and here on this blog that the rally might last longer than most people were expecting, and it did.

I've been long pretty much all the way, though I've been shaken out here and there (I'm a chicken little). The only reason I would be selling some of the positions would be to raise money to buy stocks that would likely to move faster than what I have.

There are so many technical breakouts on individual stocks almost every day since late December that it is impossible to be in them all. My most recent purchase was today, call options on North American Palladium (PAL). JASO went lower than what I would have liked, but bounced right back, making 50% gain on my options. CENX that I bought almost on a whim on the breakout continues to go higher. All I do on this stock is to keep raising my stop limit every day. I've heard about a new industrial metal ETF, which should be good for both CENX and PAL, and probably MTL. UCO is up further since I sold my call options. I switched to more liquid options on USO, out of money April calls (strike at USO $50; currently USO is about $40) just as a crisis hedge (Middle East is volatile). Even those are making money.

I don't have enough funds to play, but just from TA, financials seems to be ready to break out. Individual names in financials have already started to break out. Among too-big-to-fail banks, I like Morgan Stanley (MS) setup.

Since I cannot be in all and I don't have enough funds, I might as well throw out some names that I've been watching. Many of them have already broken out to the upside, but you could wait for backtesting. Just for your entertainment, and none of them is recommendation. Please do your own due diligence.

JLL
MS
GBG
IVN
AFFX
SQM (just about to break the resistance at $40)
BLL (right at $51-52 resistance)
TUP (resistance $50)
URE
Canadian oil/gas trusts (I have PVX that I've had for long time for dividend, it spiked 6% today)

Good luck and good trade. For now, buying the breakout has been working, which I tend to take it as a sign of a bull market in stocks. Many people these days say that strategy is outdated, that it doesn't work when the market is this manipulated (whether by the Fed or Vampire Squid). I'm just saying it's been working, particularly these past 3 weeks or so. But remember, the stock market IS NOT the economy.

Another Leg Up for JASO?

I played JA Solar (JASO) on December 14/15. I bought the breakout on a huge volume, sold one day later for a tidy profit. It may be forming a bull flag (a continuation pattern after a sharp movement), and getting ready for another move up.

JASO's chart is rather messy, but short-term, as you see, the resistance was around $4.90. That's where it turned back on December 8. Then for three days it declined on a very low volume. I was watching to see if it breaks out on a large volume, and sure it did on December 14.



I continued watching to see how it behaved after the breakout, and I decided I liked what I saw, a bull flag. So I bought it again, with initial target around $7.50. There is a very thin zone between $7 and $9, so it could run up to $9 in a relatively short time. The point and figure chart of JASO shows the target at $10.75. But it all depends, I think, on how the general market is going to act. (At the moment, I continue to think Dow and S&P will follow Nasdaq's lead and go up to 61.8% Fibonacci retracement.)

This is nothing fundamental, just technical. I don't even like solar stocks as a sector (I don't quite believe in a private sector that constantly needs public subsidies). But a trade is a trade, and it's a good one that makes money.