Thursday, June 11, 2009

Trolling in the Low Priced Waters—Crabs may be nipping at my toes!

Remember my PDRT and my dumb ass admission about not selling into it….they’ve declared bankruptcy—just days afterward.  My opportunity to sell at .35 now is an opportunity to sell at .02.  So never believe (and I don’t) that the stock price discounts all known information!  A good lesson in doing the hard thing (selling into a froth and locking in profits or the obverse) is often the right thing.



I’ve been deploying, with very good success, my buy low sell high mantra as it pertains to volatility.  By low volatility, sell high. I’ve been screening for stocks where the Bollinger is inside the Keltner Channels or some variant where the price is breaking above/below the Keltner channel.  I found SPRD on such a scan.  Day before yesterday, I elected to act on that find.  I put a buy in for a limit of $2.40…it was hit, and for a little while it was the high of the day.  I felt cheated! But, the darn thing took off. I sold .75 of my position at 2.88.  It went past $3.00, and I had remorse.  Those emotions!

Also in the Chinese wireless space is CNTF. Here’s a chart:



Some will remember my Acapulco Cliff diver cum mountain scrambler stock, WH which I’ve held steadfastly because I believed that fundamentals trumped technical action.


Of course, my position was small enough that I could do this and not be bothered.  I did not sell into this spike.  I’m just going to hold and perhaps add to this position over time.  The volume is constructive….but the volatility is high, and it is not for the faint of heart. 


Here’s another holding….Seemed like a low risk entry @ .76.


While I don’t normally troll in these waters, I’ve had the best luck with the “Stocks under a $1” crowd.  Here’s my final holding.  I find the volume interesting.  The chairman owns a good bit of this stock and has been selling.  Someone is buying….I have this stock at a whopping basis of just less than .20 per share. 




New Dragon Asia Corp., together with its subsidiaries, engages in the milling, sale, and distribution of flour and related products to retail and wholesale customers. It produces and markets wheat flour for use in bread, dumplings, noodles, and confectionary products. The company also provides various instant noodle products, such as packet noodles for home preparation, as well as snacks and cup noodles for outdoor convenience. In addition, New Dragon Asia offers soybean products, including soybean protein powder and soybean powder to food and beverage manufacturers. Its flour products are marketed under the ?Long Feng' brand name. The company sells its products principally through distributors in the People's Republic of China. New Dragon Asia also exports noodle products to South Korea, Australia, Malaysia, and Indonesia. The company was founded in 1999 and is based in Longkou, the People's Republic of China.

Seemed like a decent prospect to be in a stock that fed the hungry masses--though their sales performance has markedly declined (which is not generally a good sign). It's a flier to be sure.

My son graduated from HS on Saturday.  He is down at the beach…he’s not bothered to call.  I called for just 30 seconds to ensure that he was okay.  It sure is freeing to have him reach this important milestone!

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