Thursday, April 7, 2011

Mind at Work

Great news! This morning as I dreaded waking up and getting moving, that is when my pulled/torn side muscle is the WORST, I actually only felt a dull way off pain! I can now actually raise my right arm and move pretty freely! Amazing. I can put the duct tape away if this keeps up. I am actually excited about this, what a relief.

Getting plenty of web traffic from the Honey Badger content! I'll take it anyway I can get it. Tomorrow is Friday night so get those requests in. I have a outline for a longish "is silver in a bubble" post but I don't have time to get to it. Maybe this weekend.

Chicken Parm FAIL!
Last evening my wife had a function to attend so I was on my own. This means I swing by the liquor store and buy beer. I was sort of hungry and in the small strip mall there is the beer store and a pizza place. I went over to the pizza place to grab a sub. I had never had food from this particular place before, so I went with a chicken parm sub. This choice is a good way to test a new joint's food I think. Here's how it went.

It sucked. This place uses grilled chicken for the sub! I mean, who does that? If I want healthy grilled chicken I will cook it on the Big Steel Keg. I wanted deep fried crunchy goodness. Instead of a great crunchy, cheesy, saucy treat I had a soggy, mushy mess of a Italian dinner plate on bread. FAIL.

There should have been a heads up here. The menu listing should have said "We don't fry food like all other sub shops since time began, we grill it instead. Buyer beware." What a bunch of clowns. I ate about a quarter of it and then pitched it. This is just not right.

Mind at Work
Before I trot out some charts and a direct line as to how I think (scary indeed) I want to say a couple things:
-Technical analysis/charting varies among users. There are rules, definitions and accepted criteria for various parts of it. That's great. I do what I can but I am not perfect.
-Terms and lingo are not things I ever really mastered.
With that said, don't email me or comment with "you drew that line 10 cents off!" or "that is NOT a so and so pattern". I am a hack, if I am doing it wrong then I try to improve. The point of this section is to show a couple trades and what I was thinking, more for me as a record, but I thought readers may like to see it. If you think it was all bullshit because my charts are all wrong, it may well have been. I do my best. I am fine with that because I am the honey badger and honey badger don't give a shit!

With that out of the way......

RPM Trade
After talking to my wife she had a couple ideas about stock sectors to try out. One idea was re-painting and fixing up things in the springtime. I found RPM International (RPM) which is the maker of "Rustoleum" and many other products. They sell to big industry too. I was not looking at it fundamentally, but I wanted to see if I could find a technical signal to try the stock out.

Last caution; I am going to mention some additional indicators that I use for supporting evidence for stock positions. These are even more amorphous than candlestick charts. I have seen stocks with the worst stochastic's moon shot and stocks with the best get firebombed like Dresden. If you think I am using them wrong, honey badger don't give a shit.

Here is the first daily chart for RPM (click for bigger view):

Here is how I work:
-Place long term support/resistance lines for the stock. This will need longer term charts to see where that is. For RPM I drew white lines for:
$22.80 - long term support
$23.60 - first resistance
$24.00 - long term resistance
When I was working on this stock on Sunday March 21st RPM was just coming back to the old support at the $22.80 line. Old support can be new resistance so what made me interested?

The green arrows on the stochastic (bottom pane of chart) show a double touch pattern. The last time this happened (far left) the stock had a nice run up. The second pane down shows volume and the buying interest was good as well. Both added to the idea that RPM would regain $22.80. I bought at market open on March 22 at $22.79. I mentioned I liked it here on Monday the 21st.

RPM moved well after breaking above $22.80 and it soon crossed first resistance of $23.60 easily. Buy volume was great so I let it ride. On Friday April 1st RPM was breaking long term resistance of $24, so I sold the stock at $24.05 for a nice 5.5% gain. I saw nothing wrong with the chart, but I just wanted to take a win. RPM earnings were today and they did very well. The stock is at $25 and change so I missed a bit of profit there. That's the way it goes. Here are my entry and exit points marked in red arrows:

I will revisit this stock in the near future should it base well here.

At the same time I looked at Sherwin Williams (SHW), the paint company, in the springtime thesis provided by my lovely, sexy, brilliant wife. This one was a bit different but I did get interested. Here is the first daily chart (click to get a bigger one):

Again you see my white lines:
$83.25 - long term support
$86.00 - long term resistance

So why the heck was I buying in on March 22 at the open at $82.08, a ways off from old support? Do you see the rectangles I have made in the picture on the candlestick chart?:
-Buy volume was coming on big (not 20/20 hindsight, 3 great accumulation days into the 22nd)
-Candlestick pattern of "bullish squeeze" with a big red candle and then two subsequent inside days (within the last candle both times). Usually a good sign. Both the MACD and stochastic gave weight to the move up (green arrows).

I waited for a little upside confirmation and went long on March 22nd at the open at $82.08.

Long story short SHW moved well right up to old highs at $86 on April 1st and I exited at $86.00 that day. Red arrows show entry and exit:

As of now SHW is still looking at that level and may be interesting later on should it break out over $86 and hold.

So that is how my mind works. In a post a while back I went over what it takes to do your own trading. Homework was a huge factor, you have to work up ideas with real effort. Why did I do this post? I wanted a blog record of these two trades as I feel I executed very well. I also thought maybe some of the readers that have an interest in this stuff might like it. Trust me, I have had false signals, failed patterns, and just bad trades too. Maybe I will cover one of those if anyone is interested.

Have a good night.

10 comments:

watchtower said...

Glad to hear you are doing better GYSC, that's been going on for awhile with you.

I'm thinking that if you had some "HONEY BADGER DON'T GIVE A SHIT!!!" bumper stickers for sale on the side of your blog you'd make out like a bandit!

getyourselfconnected said...

Watchtower,
I want to change the banner from "Examining the disconnect between perception and reality" to the honey badger line, what do you think?

watchtower said...

Eureka!

scharfy said...

Honey Badger.

Funny

getyourselfconnected said...

Hi scharfy!

Jennifer Hillier said...

Honey badger don't like grilled chicken on a chicken parm sub! WTF? A chicken parm sub needs FRIED CHICKEN, yo!

Epic food fail.

Anonymous said...

You clearly dont understand TA. Let me break it down to you as it was explained to me.

Best thing to look for is when stocks form a reverse Trinity pattern. When the pattern is complete, you have 2 choices. First is the stock may head higher by breaking through Sentinel resistance. If not, it will break below the Merovingian line.

Also, look out for a double Morpheus pattern as it may indicate a Nebuchadnezzar top is forming. If this happens, you may get a Neo formation or perhaps an Oracle pattern headfake. If that happens, resisistance will be broken and Zion will have had it.

getyourselfconnected said...

Anon,
EXACTLY!!!

PAAS today, holy crapola!!!

watchtower said...

GYSC did you happen to catch this today?

http://tinyurl.com/67edtzb

"Nazi warplane lying off UK coast is intact"

I thought that was pretty interesting, of course it might be because I enjoy seeing WWI and WWII warcraft.
Wish the Brits could get this plane raised, would love to see some photos.
Or better yet, see it up close in a museum one day.

getyourselfconnected said...

Watchtower,
I did see that. It looks like side scan sonar found it. It would be great if it could be raised, I hope it holds together.