CHGS, SHZ : Two stocks with huge moves

I mentioned CHGS in this post. In that post, I mentioned that I had sold 1/2 of the position in the ramp and that I would re-buy if it pulled back in.  Time passed, and it didn't pull back down below from where I had sold it.  Accordingly, I bought back into it...in a greater size than what I had sold.  Yesterday's surge was unbelievably wild.  It is also an example as to how stop losses on the speculative plays can shake you out before the move gets going.

Here's the chart (Click!):

First, note the dip before the enormous break.  If your stop was too tight (10%), then you may have easily been shaken out before the rocket boosters engaged.  Speculative plays require speculative positioning (capital allocated).  I did not have a stop on this as I had my capital allocated accordingly, and I believed that with the technicals and the fundamentals, I had a low risk entry.

Second, I was lucky to be at my desk yesterday rather than at a client.  When the rocket boosters deployed, I systematically went into action--selling methodically into the lift.  I marked in fuschia the prices that obtained. This audacious move with huge pockets of gaps was on 46.5x relative volume. 

I currently continue to hold 15% of my position, and I may add to it. I'm interested in seeing the price action after absorption of the previous move.  For every buyer, there is a seller, and I have more to say about that a little later. This stock may very well go to the moon, and there was definitely a moon shot yesterday--but one has to ask about the sustainability of such moves.

There was other robust activity in Chinese mining concerns, SHZ being another case in point. Let's take a look.  Here's a 30 minute chart of SHZ (Click!).  I do not own it, but I did look and pass on it!

This stock rocketed up on 150x relative volume.  Wowsa!  What is interesting on this stock is that the move was not materially sold down as with CHGS.  I wanted to briefly share my view of "why" with you.  Let's take a look at two weekly profiles with the volume@price bars. No, you will not need coffee to stay awake. (Click!)

Zooming out to a weekly chart, we see two very different profiles.  For CHGS, there were lots of eager buyers from 09/09 through 03/10 that may have taken their eye off the ball and did not get out. Yesterday's ramp was some salve on a money wound, and they became very motivated sellers.

SHZ was quite another profile altogether.  The longest volume bar was cleared and there were no previous buyers at higher levels who would be motivated sellers.

I'm a firm believer of the importance of volume@price bars to understand the complexion of a chart and the stability of pricing a particular points.  I don't use pivots on stocks, but rather I look almost exclusively at this profile which helps me spot strength/vulnerability in different time frames.

Our job as traders/investors is to find high probability trades, allocate appropriate capital, and manage the risk in these trades.  I believe that V@P bars help inform that risk.  To take this one step further, looking at the long V@P bar on SHZ's chart, where do you think that there will be some very motivated sellers?  If the price falls back below the $4.00, there will be some nervous holders.

Position:  Long fractional position of CHGS

Blog Stuff and a couple of charts

I cannot believe that I let the 4th anniversary of my blog pass without mentioning it!  It has been a lonely wasteland of a place here of late.   The good news is that I've recommitted to my exercise plan.  You can read about that here.

While I abdicated doing my sector charts because Finviz had them, I'm going to go BACK to providing my sector reports.  The PROCESS of putting that together, helped me feel more centered on the market. I'll resume that not this weekend, but next weekend.  I was feeling like my work was redundant (which it is) against FINVIZ. 

Seems like the market is dominated by currency wars (fisticuffs?)  I'm not sure how any of it gets sorted out, but if we'd best keep half an eye on interest rates and half and eye on the USD levels.

I was wandering about in the foreign telecom sector.  I wanted to share a couple of charts with you.

Here BTM.  It has an interesting Volume by Price profile.  It has been a laggard in the foreign telecom area, but this set up looks promising.

I have no position in this, but I like this set up quite a bit.  Notice that if price can clear the top of the volume bar, there are few sellers lurking above.  Lots of accumulation over this period and at this price level.  As you know, there are no sure things (except that there are NO sure things).  But it's an idea for you.

While many are talking about gold being parabolic, take a look at this parabolic chart that you didn't hear anything about!

I don't own this, nor am I suggesting it as a buy, but it was a nice parabola! As you might surmise, as with most of these telecoms, the dividend made it very attractive.

TNE is another interesting chart:

I'm not thrilled about the fundamentals, but there is some volume coming in, and it might be worth putting on a watch list to see if it can make some more progress.

I don't own any of these, and BTM is the chart pattern that I particularly like.  Not much exposition here, so I'm sorry for my laziness.  I just wanted to throw a couple of charts out.

Here's a photo opportunity that my son alerted me to today--a garter snake on a shredded Busch beer can.  

TRIT

Here's a quick chart of a stock that I own, TRIT.  (click to make larger)

I have some technical and fundamental aspects of this name that I wanted to share with you.

TRIT had a terrific day, advancing 13.26% on  3.42 relative volume.  There is some favorable air space above the current price action, but a big hurdle in the $14- $5 range.  Caution is warranted here for any new entries as the BB% is over 1 (1.21 in this case), a largely unsustainable condition.  I found this stock in a sector drill down. You might reasonably ask, "Which sector?"

When you poke around in places, you find some interesting things.  This ticker shows up in three different sectors in three different places!

• Stockcharts: Water Utilities
• WSJ Industry Tracker :  Industrial Goods and Services\Electronic & Electrical Equipment\Electronic Equipment
• FINVIZ:  Services - Technical Services - China  (this is where I 'discovered it')

I like this company on both a technical and a fundamental level.  I'm in at $9.17.  It has been volatile, and it is, for most larger traders, too thin. I bought primarily on the chart, and secondarily on a 'cursory' view of the financial information.  Here is what FINVIZ shows

At the time of my purchase it was a $9.17 stock of which $4.06 was cash.  It has income, sales/income growth and no debt.  It was worth a small flier.  While FINVIZ lists the institutional holdings, there are two great places where you kind find this information.

My favorite place is J3SG.  You can also find it at the NASDAQ site which also will list short interest over a 12 month period. The institutional sponsorship is very low.  This low sponsorship does not bother me--I don't mind being in an undiscovered stock that gets discovered.

This ticker provided a good opportunity to show how a few things can come together with a little hard work on your part.  Good research tools (charts/fundamentals), developed trading/investor skills, and penultimate organizational skills (to keep up with names to watch) represent of great trifecta to help improve your portfolio results.

Position:  Long TRIT in my trading account.

COST: Holding onto a Critical Volume by Price Bar

Here's a chart of COST. I'm showing the Volume by price bars, extending the most critical VbP bar in pink.

(Click on the chart to make larger)

If it breaches that pink zone, there could be a significant air pocket below and a rough ride for those long this stock.

Position:  None as of posting date.