Back in May I did something I usually don’t do. I let folks watch a specific ‘stock trade in progress’. Why I don’t do it ought to be pretty clear. First off, I got a lot of snark and kibitzing. That can lead to emotional states that leads to bad trades. Fundamental rule of trading is be dispassionate.
Second, if some money bags wanted to ‘game my position’, it makes it just so easy…
At any rate, as a reminder, the posting is here:
I opened a position in JPM as they were falling on terrible news. I did it in a complicated way, some of which I’ll gloss over here. The upshot of it all was that I exited part of the position (the ‘day trade’ or ‘couple of day trade’ part) at about a wash (tiny loss) while keeping the longer term “expected swing trade” portion for longer term gain. My “buy price” was $34.70 at that time for a few hundred shares. This looks like a good time to revisit that position and think about it, as it is at $48.79 for a gain of $14 / share. Don’t want to get piggy ;-)
Here’s the chart today:
This graph has all the markings of continued rise. The price is in a pretty steady ‘lower left to upper right’ and price is nicely stacked above the SMA lines. (Too nice… I’ll likely sell down a bit and expect to buy back on the next ‘dip’ to the SMA stack. At a minimum, protect with puts or a stop loss sell order). RSI is up ‘near 80′, but in that 50/80/50/80 oscillation of steady climbing good companies. MACD is doing a ‘steady weave sideways’ of a steady riser too. (But the time to buy is when one of them takes a dip back down…) ADX is well over 40 and not yet inflected down, while we have “Blue on top” DMI+ of 30. Saying continued strong run.
The only thing wrong with this chart is how good it looks…
PE is now up to 9, and the dividend is down to 2.46% per BigCharts. Still, not bad.
What will I do? Probably thin the position a bit, put in stop loss on the rest (or buy puts depending on how low volatility is) and then put it on a watch to buy more on the next ‘dip’ to the bottom of the SMA stack.
Let it run as long as the market feeds it, but start preparing the automatic exit.
Gotta say, for all the tension up front, this is ending up looking like a textbook trade. I could complain that my “buy” point was $3 off the absolute bottom, that I could have had even more gain had I not rabbited out of the day trade part so fast, that I ought to have done a trailing ‘buy if touched’ to get bought into more on the proven up run. Woulda, coulda, shoulda…
Or I can just enjoy “almost at the bottom” buy and selling “after a good run up”… ;-)