Monday, February 13, 2012

Position Review and Thoughts on Rotation

Never fond of Monday's but today was not actually half bad. Tonight I can access and use Twitter on my mobile phone but I cannot use any of the buttons or post tweets on my desktop computer. No one seems to have much of an idea about this. If you can help, email me or use the comments section.

Position Review and Thoughts on Rotation
I have been long a few stocks for a while now. After a few down days and some positive market movement today, it's a great time to review all 5 and see where things stand.

Opened a position on 1/31/12. The setup was a long intact uptrend and a move over the $34 range which was anew breakout area. Today's chart:
AREX had a crazy day on 2/8 and hit as high as $38. Since then it has tailed off and now is retesting the "scene of the crime", the breakout level just above $34.50. A successful touch and hold of the 20 MDA is supportive of this name going forward. That said, the stock has stalled out here.

Opened a position on 1/31/12. The set up here was a clear move out of a very tight basing channel. The accumulation volume had been excellent as well. $38.50 was key zone to clear. Today's chart:
After touching $40 this name has cooled off a bit. Volume has dried up on the downward move and buyers returned today. This one is still set up nicely for a move higher.

Opened a position 2/1/2012. To be fair this should have been stashed in my long term account. I have every indication that BANR will cross up and over $20 and run, just maybe not soon! May have been a little early here. Today's chart:
This one actually did close over $20 on 2/3 but since has fallen off. On the positive side the small gap from 1/25-1/26 has been closed and buyers returned today.

I worked on this one with a friend a while back but I missed the fireworks around 1/20-1/23. After that I was playing resolution of the bull flag as (opened position on 2/8/2012) seen in today's chart:
This one caught a price target upgrade the other day and thus a price and volume spike up. Right now it is facing serious price resistance at about $96. Above that and it's a "$100 Dolla Roll".

Opened a position on 2/8/2012. I had worked on this chart (and about 10 others) the night before and I just liked the action so I bought a spot. Today's chart:
The buyer accumulation has been outstanding for this name. The price has cleared the breakout level of $9. A bit of a pause here right now.

So all in all the 5 are not bad open positions nor in any real trouble. So what's the problem?

How many times did I use the words "pause", "resistance", "cooling off" in the selections above?

Even on market down days many names have been running well. Granted I tend to stay away from the hottest sectors (biotech, solars, chinese egg rolls) but many other things have been moving. The 5 above had real momentum coming into where I bought them, yet have slowed down.

So it could be benign reloading and the age old "resting, wants higher" sort of thing. Hopefully that is what it will turn out to be.

On the other hand there is another side to rotation of money, especially at the upper ranges of longer rallies. That means when things are moving they gather interest and steam, but as soon an it stops (resistance, news, etc) money moves along.

I think most understand rotation as it relates to sectors. Money leaves bonds say and goes to riskier assets. Buyers may walk away from the utility sector and instead chase semiconductors higher. That's well established.

What I am seeing some signs of (not absolutely, not definite) is buyer rotation from a binary choice: moving vs. non- moving.

There are some good examples in the names above and some others on screening names I have saved. Be aware and keep an eye on your positions. If they have been moving and see a pause, it's important they continue to keep moving. If they are supported by strong technicals and the momentum has been there, a walk away from buyers may mean you are holding a "non-moving" name and money will be rotating out. I may have a few in the above names myself.

Have a good night.


Anonymous said...

:0) you know I'm reading!!

EconomicDisconnect said...

Is that you T!!!! LOL, hope you are safe on that crazy drive.

Anonymous said...

ya its me.. I'm done driving for the night.. I thought I would never make it..
Safe and sound now tho..
Awesome read, I'm learning more and more with each blog.. sorta lol

EconomicDisconnect said...

Have a good night T, glad you made it!

David Batista said...

With your Twitter account, try using a different web browser on your home PC and see if that helps. So if you use IE, download and try Google Chrome instead. Or vice-versa if it applies.

GawainsGhost said...

Gawain's Ghost does not tweet.

That said, if you're looking to buy low and sell high, I'd invest in real estate right about now, especially in farm land.

Of course, that would require a substantial amount of capital. But when this economy turns around, and it will eventually, you'll get a good return on your investment.

I'm not much for flipping houses, but I do know several people who have made good money doing it. Foreclosures slow down in November and December, because these companies don't want to throw people out of their houses during the holidays, but they pick up in January and February. There are going to be some great deals out there the next few months. If you have the capital for taxes, maintenance and repairs. It will pay off in the long run, but it's going to cost you in the interim.

Oh, and by the way, here's my new Valentine's Day poem.

Valentine’s Day
Is for lovers

Not those hiding
Under covers

Valentines say
That love is real

But those biding
For hearts to steal

Learn the hard way
Valentines know

What souls striding
Intend to show

Valentines may
Think hearts entwine

Lovers gliding
Think your soul’s mine

EconomicDisconnect said...

David, yes I installed Google Chrome and its fine now. I am always behind the curve!

Gawains, thats some fine prose my man!

GawainsGhost said...

Well, I was aiming for poetry, not prose.

Feel free to share with your beloved.

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