Education Center
When it comes to trading would your advice be different for someone trading with their money in a brokerage account subject to short term capital gains taxes versus someone trading within an IRA account?
There is a misconception out there, and it is fostered by many of the larger brokerages and mutual funds that if you attempt to manage your trades yourself you are going to get burned on taxes. I suggest you look no further than your mutual fund statements where you lost money on the year but […]
Some questions about how to take positions to the downside.
The plays to the downside are very similar to upside plays were we look for a break over resistance: we get the breakout we can play and we may get the test of the breakout we can play when the stock tests the new support and moves up. Downside is the same way when not […]
Several questions about covered calls over the weekend and how we play them.
One of the things we like to do is pick stocks that are rolling in a range and then buy them when they turn up off the bottom of the range and sell the calls (or the stock if we want to) at the top of the range when and if the stock starts to […]
Some previous leaders such as AMCC and JNPR seem to be basing. Should I sell these previous leaders and buy into NVDA?
Yes, AMCC and JNPR are at the bottom of some serious bases that started back in October 2000. They are deep at the bottom and will take a long, long time to ever return to their highs. Still, that does not mean they cannot produce good returns. JNPR doubled in April, but it has since […]
I have some burning questions for a long time, and wonder if you please could answer it for me. 1. When I hear: to go ‘long’, or ‘short’, is that used for options only, or can that be applied for stocks as well? 2. What time frame is considered to go ‘short’, or ‘long’? 3. When one goes ‘short’ (if that word is applied for stocks), are all the shares sold, or only part of it?
The terms apply to both stock and options. You can go ‘long’ either, i.e., buy them. Or you can go short, i.e., sell them without owning them. If you go long you come out of pocket with cash to buy. If you go short you are selling, that is putting money into your account. When […]
When a stock does break out on strong volume and makes a 10-15% run in 2 days it’s normal for it to pull back some or even test the breakout point isn’t it before it makes another move or consolidates? Also is it possible for a stock to sell off heavy below the breakout without any bad news on the stock or if the market looks healthy? I’ve heard a stock can pull back 20-25% after a run. Is this 20-25% based on the stock price or the difference from the breakout point and the amount the stock has gained?
Yes it is ‘normal’ for a breakout stock to test the recent breakout. A stock can come all the way back to the actual breakout point. Not all stocks do this; on the strong leaders it is a 50-50 proposition. Still, even the strong stocks will come back a bit after the initial surge as […]
BRCD and FCEL, on Monday, June 11, ran hard off the bottoms on huge volume. What does that mean? I’ve seen it so many times before where a stock will just drift lower on tiny volume. Then, it’ll slowly build up and explode on huge volume towards the end of the day only to drift back down the next day. Is there any play in these?
FCEL’s pattern at Monday’s close was a hard one to call. It opened lower, traded lower, then moved to its high only to pullback toward the close. The resulting candlestick pattern was a ‘spinning top,’ something covered in the Technical Analysis seminars. It is as the name implies: just spinning and not showing us much. […]
I’m a subscriber to the daily. Could you tell me where you get the ticker symbols for puts and calls?
We take those off of eSginal which has extensive options coverage. There are several free sites where you can get most of the information, including online brokers. One is AskResearch.com, another is E*Trade online.
[I]t is hard to determine what is in play, what might or was a play and what might be a potential trade. Is there any location on your site that sorts this out?
With respect to what is in play, we touched on that in the summary tonight. What we do is put out the plays that meet our criteria of earnings and sales, pattern, price/volume action, etc. We put buy points, target profits, and stop loss points on the Daily and Technical Trader. As long as the […]
Some stock experts recommend, to assure liquidity, that we not buy stocks trading below a daily average of 300,000 shares. But this recommendation seems meaningless to me, unless the number of shares one purchases is also specified. Is liquidity reasonably assured, for example, if you buy 20,000 shares, or only if you buy no more than 100 shares? It seems to me that some ratio would be more appropriate, but just what that ratio is, I would like to know.
The primary consideration on liquidity is the ability to get out of a position if things start to fall. If volume is less than 100,000 shares on a 50 day average, there could be a problem if some bad news hits and you hold the stock. There may be no buyers no matter what size […]
