4 Stock Chart’s to point out 1-5-2010

Kandi Technologies, Corp (KNDI) – Looking at the chart you can see it is failing it’s attempt to breakout above $6.04. Volume is also lower than the previous day, it might take a good green market day to power threw. This to me looks like it will top here and continue to consolidate in the range pointed out in the chart. Keep and eye out in the next coming days as this unfolds.

KNDI chart

Taylor Capital Group, Inc. (TAYC) – Just check this thing out, this stock does not want to stop it’s consistent rocket higher. Although we had a slight down day today on the markets, you can see the gains getting somewhat weaker or not as much and ending on a red day today. Could this be the turning point or a breather? Keep your eyes open, this thing could dump!

TAYC Chart

Gulf Resources, Inc (GFRE) – This stock is continuing it’s breakout at $11.00 currently sitting at $13.65. I am not sure if it can keep going as you can see the volume was cut in half on this day. If you did not get in at $11.05 then i would say you missed the breakout and the easy gains. Next….!

GFRE chart

Intevac, Inc. (IVAC) – Looking at this chart it is deffinent breakout at $13.53 and it continues with good volume. If i would have caught this sooner, i would have gotten in that second day at $14.00 for a nice dollar gain on the day!

IVAC Chart

Keep a look out for more, i am always on the hunt for interesting chart’s with obvious buy in signals! :)

Stock Watch 1-5-10

Stock Watch 1-5-10

Taylor Capital Group, Inc. (TAYC) – This financial company just keeps going, made another 2.11% gain today and does not look like it wants to stop. When looking at the chart you see this big green line shooting up, makes you want to jump in. I am keeping a close eye on it, i have seen stocks do this and one day just take a death spiral down to nothing. If this does happen it could be a nice short, you just have to watch for when it starts going red. It semes as though this company is turning it self around, with new businesses and a change in Directors which could be the reason for its rocket to the moon. I am not sure this would do it, unless there has been a lot of short covering because of good news or lot’s of insider buying. Check out the charthere.

BioForm Medical, Inc. (BFRM) – A medical aesthetics company up 60+% today on the news of it being taken over by Merz Pharma Group for $253million at 2:05pm. Check out the P/R here. On the other hand released at 4:05pm this was put out “Robbins Umeda LLP has commenced an investigation into possible breaches of fiduciary duty and other violations of state law by members of the Board of Directors of BioForm Medical, Inc.” on the grounds that “Robbins Umeda LLP’s investigation concerns whether BioForm’s Board of Directors’ acceptance and recommendation of the offer is fair and designed to secure the best possible price for all BioForm shareholders” check out the report here. BioFarm also received a downgrade today to Neutral from Overweight from piper jaffray. Check out the chart here.

China Direct Industries, Inc. (CDII) – This company engages in the production and distribution of magnesium and other basic materials. This stock was up 49+% today on nothing but it’s outlook on the companies earnings for fiscal year 2010, It claims it’s revenue will be between $130-$150million. The company overall does look healthy, although it is some what risky. The charts look as if it could run some more, it’s overall resistance is around the $2/share mark and break out point around $2.40. It did start to fade some this afternoon but that is normal. The test would be how it reacts tomorrow, i would wait to see if it wants to go higher waiting to see around noon, if it starts to take a dive then it will be a nice short back to $1.40 were it has a little support. Check out the chart here.

Digital Ally, Inc. (DGLY) – This company develops, manufactures, and markets advanced video surveillance products for law enforcement. The stock was up 40% today on it’s earnings speculation and rumors of contracts. This company has a market cap of $45.6million, has $1million in cash and zero debt. Looks good to me! Chart show it is strong with large volume coming in, it has some resistance at $3.20 but looks like it wont have trouble taking that out. It does however have strong support at $2.60. This will be a potential buy for me when i get the correct signs and entry point. Check the chart here.

Kandi Technologies, Corp(KNDI) – This company through its subsidiaries, engages in the design, development, manufacture of motor vehicles. This stock had a huge comeback from its dive yesterday. It was up over 30% today on the news of it’s new alliance with Electronic Vehicle(EV), the goal being to mass produce the electric automobile in china which could bring a lot of revenue to KNDI. Although this stock had a nice spike, it hit ressistance at $6.05 and started to fade from there. The buy in signal for me is if it can break 6.20 and hold, which will validate a Breakout and this beauty could run pretty high! Check the chart here.

Intevac, Inc.(IVAC) – This company provides manufacturing equipment and solutions to the hard disk drive industry. The stock was up over 22% today on news of it receiving eight 200 unit order from Lean Systems, which is good news for the growth of (IVAC). The chart on this is a true technical breakout at $13.59/share, it started to fade in the afternoon but held above this key level. If it holds true and does not end up being a fake-out breakout then we could see some good gains over the next couple days. Check the chart here.

GenVec, Inc. (GNVC) – This is a clinical stage bio pharmaceutical company, that had a nice breakout today. This stock was up 17% and is a true breakout at $1.20 and now resides at $1.41/share. The volume is fair but not huge, this could be a fake-out breakout and could set up for a nice short. It has not had a P/R since November, which seems shady to me. I will watch to see what this does, most likely look to short it if i can find shares and i will only short into a spike. Check the cart here.

Gulf Resources, Inc(GFRE) – This company through its subsidiaries, manufactures and trades bromine and crude salt. The stock has had a steady rise for the past 5 months now with only a few pull backs, today had a huge spike and finished up 17%. Seems the company is growing exponentially with new productions lines, and chemical compounds. This i am sure will have a profit taking pullback, at which time will be a nice long entry point. Check the chart here.

Jim Cramer’s Getting Back to Even Book Review

Booya Jim Cramer

A lot of people have their own opinion on Jim Cramer, some good some bad. I on the other hand think he is a great entertainer with his show “Mad Money”. I also love his books that he writes, they are very informative and his methods he uses are Genius in my opinion. Now mind you they are for what he calls “Home Gamers” that do not have professional market experience nor the time to dedicate fully towards the market. I use Cramers books as a means of learning new strategy, or gain a different perspective of the market and how it works, i mean the guy did run a half a billion dollar hedge fund. I also do not solely use his methods and nothing else, i try and learn every strategy or method possible and Frankenstein them all, this way i take what i want out of it and come up with my own working strategy.

Cramers latest book “Getting Back to Even” is very well written and geared towards individuals that have lost a substantial amount of money in the not only the market, but IRA’s, 401k’s, and the Housing market. His tone when writing this book is very positive and encouraging, makes you feel that you can “get back to even”. I literally read this book in a week, only because i love learning this stuff and cramer makes it interesting. Listed below are the chapters in the book, and as you can see he covers just about everything.

Chapters:

Don’t Give Up!

Crossing the Stock Market Minefield

Putting the Pieces Back Together

Dividends: The Best Offense Is a Good Defense

How to Invest in the Recovery: Twelve Stocks to Watch

The Next Big Thing: Regional Banks Poised to Grow

Getting Back to Even Like a Pro: Using Options to Replace Stocks

Taking Options to the Next Level: Advanced Strategies

How Your Generation Should Respond to the Crash

Twenty-five New Rules for Post-Apocalyptic Investing

Coping with the New World Disorder

Afterword

Acknowledgments

I wont go chapter to chapter detailing what i like and dislike, but i will inform you of my favorite parts, just to hook you so you go out and read it yourself. This book is well worth the time and effort you put in to reading it.

1st Favorite section: Dividends, you think you know but you have no idea… :)

Jim as we all know from his show preaches diversification, well of course he does it again in this book. This time he goes in more detail as to why and how important it really is. One of the main benefactors of being diversified are the companies that pay you to own their stock, we are talking dividends. I always new about dividends and how they somewhat work, but after reading his chapter on them, well i thought i was a pro after it. The methods he presents about dividends and how to play the company that pays them are truly gold and makes complete sense. He helps you not only find these good company’s paying those juicy high yield dividends but also what to look for when you are doing your homework, which what he says is up to date with this new market we are in. The explanations he gives are in plain English and in such rich detail, which makes you feel as if you know dividends and could teach them to someone else.

2nd Favorite: Options

Now i have always been curious about stock options and how they actually work, but when reading about them i just kinda through up my hands and stick to the regular common stock. Well one of Jim’s tactics to getting you “back to even” is playing with options, he does a great job of getting you to read those chapters even if you are not interested in options. So i take a dive into them and see what he has to say. Jim gives a excellent description of options and explains exactly what they are without giving you a bunch of useless terms or jargon. I truly and finally understand options and how they work just by reading this chapter and feel that much smarter now. His second chapter on options titled “Taking Options to the Next Level: Advanced Strategies” gives you a very sneaky yet cleaver way of using options to your advantage with very minimal risk if any risk at all. I wont give his tactic away but i will say it involves both options and common stock in the same company, which if you apply this strategy correctly it could bring a nice return your trading account. I will be experimenting with this tactic in the new year and am excited to see the results, all else fails it will be a great experience.

Overall message behind the book

I can honestly say that Jim Cramer does care about the regular investor and i am very appreciative for him to share is wealth of knowledge and wisdom with his readers and viewers. With that being said you as the reader can find this book not only entertaining but very informative. Cramer iterates over and over how much he thinks this is a golden opportunity in getting back in the market and buying up those beaten down stocks and recovering your account. I believe this is his best book yet and recommend it to everyone!

Side note

It is funny how after reading all of his books, he literally recites all the information in his show which to me is kinda cool because i can pick that out and think to myself which book he said that in and what section, or at least i do :) . For those of you who have read his books should know what i am talking about. ;)

Pick up your copy of his new book here:

Jim Cramer's Getting Back to Even

Cramers other books that I enjoyed reading:

Jim Cramer's Real Money: Sane Investing in an Insane World

Confessions of a Street Addict

Related posts:

Van K. Tharp’s “Super Trader” Book Review

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Trading Desk

Trading Desk

What do you have on your trading desk? Are you organized or even care about your trading desk and staying organized, i mean it is your money making machine.

I know when i first started trading and getting highly involved in the market i was always curious as to others trading desk’s setup and the equipment that was used.

Well just in case you are wondering, here i give you details of my setup and what i have on my desk.

I have a pretty basic desk setup, i am very organized with a pretty powerful computer.

computer I use:

Duel 19in wide screen monitors

Amd Quad core cpu

4 gigs of ram

Windows Vista Ultimate 64-bit  

1terabyte hard drive

Internet Connection:

I use a direct(wired)connection to the internet.

I do not advise going wireless when trading due to being vulnerable for drop connections or a weak signal.

I keep my laptop by my side for a back up, just in case my main computer fails for some reason.

Trading Software:

My Platform setup:

i have my futures, live news feed, intraday chart, level2, time and sales all running on my TOS platform at once. I also have a browser going with yahoo finance open, and StockTwits.

Desk Elements:

calculator- I use a basic calculator for quick calculations, determine cost of a trade subtracting commission or general use, i find it very useful.

Note book-A simple cheap notebook is always handy for jotting down notes and ideas or, keeping a trading journal and tracking your trades.

Sometimes i have CNBC in the background(for breaking news/entertainment i don’t take advice from those talking heads :) ), and sometimes i have music on.

Posted below is a quick picture of my desk.

desk

6 SPDRs You Should NOT Be Afraid Of!

6 SPDRs You Should NOT Be Afraid Of!

I use and follow these specific sector ETF SPDR’s when trading and investing.

Financials SPDR(XLF)

A wide array of diversified financial service firms are featured in this sector with business lines ranging from investment management to commercial and investment banking. Among the companies included in the Index are JPMorgan Chase, Wells Fargo, and BankAmerica Corp.

Energy SPDR(XLE)

Energy companies in this Index primarily develop and produce crude oil and natural gas, and provide drilling and other energy-related services. Leaders in the group include ExxonMobil Corp., Chevron Corp, and ConocoPhillips.

Health Care SPDR(XLV)

Companies in this sector primarily include health care equipment and supplies, health care providers and services, biotechnology, and pharmaceuticals industries. Pfizer Inc., Johnson & Johnson, and Abbott Labs are included in this sector’s mix.

Technology SPDR(XLK)

Stocks primarily covering products developed by internet software and service companies, IT consulting services, semiconductor equipment and products, computers and peripherals, diversified telecommunication services and wireless telecommunication services are included in this Index. Components include Microsoft Corp., AT&T, International Business Machines Corp., and Cisco.

Utilities SPDR(XLU)

The Utilities Index primarily provides companies involved in water and electrical power and natural gas distribution industries. The component companies include Excelon Corp., Southern Co., and Dominion Resources Inc.

Consumer Discretionary SPDR(XLY)

Industries such as automobiles and components, consumer durables, apparel, hotels, restaurants, leisure, media, and retailing are primarily represented in this group. The Index includes McDonald’s, Walt Disney Co., and Comcast.

resource here

Is the pattern day trader rule hindering your trading?

Is the pattern day trader rule hindering your trading?

For those of us that either start with a small broker account or just have less than $25k in your broker account, are subject to this rule. First what is a pattern day trader, pattern day trader is defined in Exchange Rule 431 (Margin Requirement) as any customer who executes 3 or more round-trip day trades within any 5 successive business days. A round trip means if you buy a stock and then sell that stock in the same trading day is considered one day trade or one round trip. You are given 3 of these day trades for every 5 business days. If your account is greater than $25k, than you don’t have anything to worry about.

What is the purpose of this rule?

This rule came into effect February 27, 2001, by the Securities and Exchange Commission (SEC). The purpose of this rule is to basically protect the small investor or trader from totally being ignorant in the market and being eaten alive by professional traders. I can see this rule being useful for an individual who is just starting in the game of trading (yes I think it is one big game) and slows down that persons losses and prohibits him from losing a lot in a short period of time.

Now for those of us that have been trading for some time and have gained quite a bit of experience in the market and are not totally ignorant when it comes to investing but has less than $25k in our accounts, this rule just slows our progress in building a bigger account and breaking out of this rule.

Now for the good stuff!

I talked to my broker and asked if i could open up a second account with them, and in doing so would I still be subject to the PDT rule for both accounts combined. For example, if i used my 3 day trades in one account and switched over to my other account would I have 3 trades for that account or would I have 3 day trades for both accounts together. Well come to find out, opening that second account does in fact gain you 3 extra day trades. So if you only have $10K to start your investing or trading account you could split that into two accounts and now you have 6 day trades for every 5 business days, now that is pretty cool! Well of course you could open more and have more day trades but then you are pushing it, 6 day trades for one week is plenty IMO.

So now if you used up your 3 day trades half way through the week, and you bought into another stock you then have to hold that overnight regardless if it tanks on you. With this option you could use your 3 day trades, then with a click of a mouse switch to your second account and now you have 3 fresh day trades to use.

Hopefully this will help those seeking an alternative route around this rule.

If interested in learning more about day trading in general i suggest A Beginner’s Guide to Day Trading Online (2nd edition)

Methods And Indicators Used When Looking For A Swing Trade

Methods And Indicators Used When Looking For A Swing Trade!

I don’t know about you, but when i look for potential plays in the market i want to find them fast and easy without having to do much digging around and analyzing a stock in to much detail. I will point out a few methods and indicators I use in order to cut the process of finding plays in half. Keep in mind this is how I look for Swing trades. 

Swing trade in other words means holding a stock for more than one day, usually ranging from 3-5 days or longer, making profits in a short period of time while maximizing the potential in profits over a few days weather you go long or short.

Lets get right to it!

First, how do we find company’s with a nice chart pattern that is setting up for a nice short or long swing trade?

I start by going to FinViz website, and use there custom stock scan tool. I then click on the create custom scan, and enter in the data criteria I am looking for. I will start with entering in a price range, since i have a small account and a risk taker I will scan for $5-$10 stocks, you can also enter in a percent gain for stocks to, something like 1-10% gain for that day. Enter the volume range as well, we don’t want to trade an illiquid stock that would be hard to get in and out of. I usually enter in something like, grater than 1mil shares traded in a day. Now for this scan tool you can enter in other data for a more refined search but I don’t use them, I will just find plays and use charts to get my own opinion on chart patterns.

Now I do sometimes set the check boxes above the price, to get some better search results so i don’t have a list of 100+ stocks i have to scan threw and research.

After you enter in the data you wish to search stocks on based on your input, you will see a list on the right side with all the stocks that meet the criteria entered.

As soon as I get my list, I open up my charting software(I use ThinkorSwim) and I will enter in the ticker and get a quick glance at the chart. After I narrow my list down based on chart patterns of the stocks I will use some basic fundamental analysis for each stock to validate it is a good company, more on that in a bit.

Indicators I use with my charting software to determine a good swing are, moving averages, volume, the ADX indicator, MACD, and support and resistance areas.

Moving averages, I use the MA(4),EMA(9),EMA(200), 4 day, 9day, and 200 day moving averages all with different color lines for better chart reading.

If you are unfamiliar with moving averages i suggest reading about them here.

Now, the only thing I use moving averages for is when I see them cross either up or down signaling a change in the trend. I use the 4 and 9 day moving averages for this, because they are closer together and will give me faster signal than a 20 and 50 day moving average signal would.

I have provided and image that gives and example of the MA crossing with a upward trend following,

notice my chart settings, its exactly what i use. click it to enlarge it.

The volume is another good indicator, now we did set a criteria for our stock search that has the specified volume in it. But when glancing at a chart, you can notice if volume is beginning to fade or steadily increasing both would also factor in when deciding to go long or short.

Average directional index (ADX) is one of my favorite indicators, this thing will help you determine if the stock is trending in one direction or consolidating and just trading sideways (Boring!). I have my ADX set on 14 days, which also will give me a shorter time frame and a faster trending signal. I will get short and to the point, if the signal line for the ADX is above 20 then it is trending, if it is below then it usually means it is trading sideways. We want a stock that is trending and not just siting sideways, so we can gain profits on the up or down side.

The indicators I mentioned i use as a check list. When I type the ticker into my charting software, I look at the chart, check to see if the moving averages are crossing(up or to the down side), i look at my ADX and see if the stock is trending or approaching a the 20 mark validating a trend. I check out the MACD and determine if that signal line is crossing the MACD line and is above the 0 mark, then i check out the volume, determine if it is fading or increasing, I then do some basic fundamental analysis and check for upcoming events for that stock or and PR that have come out that could determine the future price action for the stock. If all is good i add this stock to my watch list, and i also write down an entry and exit price that i would like to get before i enter in the trade. If i am going long on a swing trade my indicator to sell is when i see those moving averages cross to the down side, and with this setup of the moving averages it is usually 3 down days that will make them cross.

Note, i use yearly and 3 month charts when looking for chart patterns necessary for a swing trade.

recommended books:

The Swing Traders Bible: Strategies to Profit from Market Volatility (Wiley Trading)

This book is very good and well written with lots of chart examples.

Swing Trading For Dummies

yes it is one of those Dummies books but it was very informative and i learned a great deal about swing trading.