Friday, 23 November 2007

On the Radio

Our friends from Absolute Traders were invited for a radio interview this Sunday, Nov. 25, 2007, on DZBB (594kHz) at 11 am. I'm sure the topics for discussion will be about the stock market and how people can make money off of it. Maybe there will be some discussion on technical analysis.

Good luck! May the listeners get an idea of what they're missing.

Wednesday, 21 November 2007

Laying a Smackdown on WWE

Finally! Tarantrader has come back to post a new entry!

One of my favorite entertainment companies has long been listed in the US market and is undergoing some rough times, as far as trading is concerned. This is none other than World Wrestling Entertainment (NYSE:WWE).

As we can see in the chart, it has formed a double top after going up for most of 2005. After breaking down from the neckline, WWE has gone sideways to form a symmetrical triangle and it hasn't broken down from there yet.

I know what some of you may be saying. This guy deserves his nickname, why would he even want to trade something as fake as wrestling? Excuse me, first of all, this is sports entertainment. As such, there's a script to be followed. Plus the hazards are real. As real as the stock being hazardous in itself. Also, an opportunity is knocking. Shouldn't I be taking steps to try and answer opportunity's call?

So just how good is this opportunity? Currently, I'm looking at WWE's support at 14.56, giving me a trigger price of 14.27. That translates into almost a 20% return. Not bad for something considered dubious.

Now, if only the volume can be as attractive as the price movement. I fear that should I be daring enough to short WWE, I could be setting myself up for a world of hurt. Worse, WWE could lay a smackdown on my candy @$s if I'm not careful.

Just the same, an opportunity is an opportunity. And as traders, it's a mortal sin for us to just watch and do nothing. So what's a guy to do with WWE? Definitely a short sell is in the works but we just need to be patient.

God will help in our decision for this and it's time to take on Vince McMahon's challenge.

And that's the bottomline, 'cause Tarantrader said so!

Friday, 16 November 2007

Caution: Coffee is Hot

How many times have we seen people go out for some coffee? Not just any coffee, it has to be Starbucks (Nasdaq:SBUX) or some other similar java joint. Concentrating on SBUX only, things are looking pretty bad for the Seattle-based company.

I know what some of you are going to say, "What kind of gibberish are you talking about? They just reported a 36% increase in their earnings!" Right, so why was it trading around $22 (roughly 8% lower than the closing price of $24.10) in the after-hours market?

Regardless of whatever fundamental news or data that came out, it is very obvious that SBUX had a double top during 2006 to reverse its previous uptrend from years back. In fact, based on the MACD, its momentum is going to bring it to lower levels. That now explains the bearish sentiment prevalent in the stock.

It will probably take some more time before my downside target of $17.77 will be reached but it is already halfway there. The problem now will be if people suddenly become bullish with this as they find it cheap or they will do some short covering.

Thursday, 15 November 2007

BIDZ Starts Now!...and Ends Now

Once in a while, a rare opportunity knocks on your door. Last night, it happened to be lady luck knocking. I was given a chance to trade one of the newer stocks listed in the Nasdaq, Inc. (Nasdaq:BIDZ).

It's very clear that BIDZ started with a symmetrical triangle from June to September of this year. Again it consolidates into a triangle; an ascending one this time. The resistance gave me a trigger of $15.35 as the proper price to buy it. I was targetting $17.94 for the triangle.

The premarket figures were higher than my buying price but only by 15 cents. I just posted my buying just the same, in case I was lucky to get some. What I thought was a glitch happened to be a legit selldown to $14.75, thereby giving me shares at a cheaper price than I thought. Within the first 30 minutes of trading, I saw BIDZ was very strong as it surpassed $16.30 in so short a time. I just thought, what the heck, I'll post my selling. I don't think it'll hit my target anyway.

I left the PC station for a while. After 10 minutes or so, I saw that BIDZ created a high of $18.35 at that time. I never thought that a 17% gain could be achieved in so short a time.

I'd say that this was one of my best trades for the year. It will rank high up there with my shorting of KIM earlier this year.

Can I get a replay on this again? I'd like to add another 17% in an hour...

Wednesday, 7 November 2007

Putting the Broke in Broker

What is a broker? Is it someone who's supposed to help us consummate our trades in the market? Is it someone who's supposed to put our interests ahead of theirs? Or is it someone who takes the word broker too literally as they make their clients broke?

The ideal kind of broker is one who is diligent, who goes out of his way to contact you about any update that you need to know. They give you what is due you without asking for anything more than what is rightfully due them. They do not have any right in siphoning off your money, much less use your account without your consent. In fact, they have no right to use your account, period.

I've had the experience to see this happen before and it's still happening to this day. I found out from a new acquaintance that her new broker is pulling the wool over her eyes. When he was already caught red handed, he was giving a lot of reasons yet no remorse was detected from him. So what is a client to do? The first step, complain with his boss. Unfortunately, the boss may not be interested in helping out. What's the next step? Talk to the organization with jurisdiction over the brokerage; that's the stock exchange itself (i.e., PSE). What if this isn't enough? The worst case scenario would be to bring the complaint to SEC. Of course, we're presuming that the client is being advised legally by her private counsel.

As of this writing, we heard that the said agent has been missing since 2 days ago. Worse, my acquaintance still has not received her money and the brokerage doesn't seem to be lifting a finger to help solve the problem.

How does this problem come about? This happens when the said agent, has already tasted the good life and needs to sustain it but has no regular means of doing so. So they decide to touch what is deemed untouchable: their client's money. The really creative agents have a lot of ways and means to be able to touch their client's money without even the client knowing about it. There's a promising career change in either magic or bomb disposal.

Before this turns into some long-winded sermon, I better get to my point. To the clients, this I say to you.
  1. Get a broker you trust. Whether they're your close friend, or relative, it doesn't matter but it should help. Remember, the keyword here is TRUST.
  2. It would help if the brokerage they're connected with is reputable. Why would you even want to play russian roulette in choosing the brokerage?
  3. The broker must keep you updated on all your holdings. They should be able to contact you through the celphone, landline, or even online (i.e., YM, Skype, etc.). They have to remember that aside from the price, YOU ARE KING (or queen)! Without you, there's no business to be made.
  4. Don't take everything that the broker tells you hook, line & sinker. Many brokers tell you what you want to hear. Ask yourself this, does your broker tell you what you need to know?
To the brokers/agents, this I say to you.
  1. Follow what your client tells you to the letter. The customer is king, up to a point. They're your meal ticket. Without them, you have no lifeblood.
  2. Never destroy the trust given to you. Trust is one of the hardest things to give to someone. Don't take it for granted.
  3. Live a simple lifestyle. You may hear some other brokers always partying in bars, and all that fun stuff. Why do you want to join their rat race? Once you start living a lifestyle that you can't afford but you already decide you can't have without, your days are numbered. Start counting the days that go by. At least you'll know how long it took for you to achieve your downfall.
  4. Don't create a mutual fund of your own using your clients' money. YOU DON'T HAVE THE LICENSE TO DO THIS! (see #2)
  5. You may get the respect and recognition many people give to brokers when they're in parties. They're like doctors, people always want to get a tip from an "expert". DON'T LET ALL OF THIS GET TO YOUR HEAD! You have a responsibility to be diligent to your clients' accounts.
  6. Just because you're on a winning streak doesn't mean you're Superman. The last thing you want is to let success get to you that you become vulnerable on other things that are more important like observing where to cut your losses. Once you believe that you're invincible, you're f**ked.
There may be some other items that need to be included here. However, I think this will do for the moment.

We don't need agents that double cross us. It's already hard enough for the PSE to build the renewed interest in the market. Agents like the ones I mentioned destroy the credibility of the industry and scare off potential players.

Here's hoping that these people get caught and persecuted.

Sunday, 4 November 2007

Be KinD

Many played with BKD before. Some still have it after the time to play it has finished.

As we see in the chart, BKD has moved sideways for the last 2 months. When this breaks out, the proper buy would be at 2.04, with a target of 2.40. Cut loss for now is at 1.86.

What makes me think that the chances for this to move up is good? The MACD alone was enough to tell me that there's probably some more momentum for this to rise. The question is when.

Thursday, 1 November 2007

DELL in a CHINA syndrome

Everyone is so amazed with the performance of Apple's (Nasdaq:AAPL) stock movement that other similar issues are overshadowed. Like this one...

Dell Computers (Nasdaq:DELL) was initially pointed out by Tidus as having a symmetrical triangle. The triangle is there but the volume looked wrong. But something told me there was more to it than just the triangle. So I decided to zoom out to see what else was happening here.

Since July 2006, DELL has been inside an upward channel. The resistance has been breached twice but the price returned back into the channel both times. The action last night was different. The triangle that was pointed out seems to be a setup for a break of the channel. Last night's trading gave us a significant increase in volume.

Could this be the start of a new trend? It's very possible. But let's also take a look at a similar chart that has already gone through this phase before.

CDC Corp. (Nasdaq:CHINA) has gone through the same thing before. As seen on its chart, it has already completed the cup and is now waiting for a set up for its handle.

So what do we play? It all depends on what you like...

If we play DELL, we're just playing either the triangle setup or the channel itself. If it was the triangle that you were looking at, the proper buy for it was around 29.87, with the target at 33.82. Cut loss would be at 27.73 but this improves with every day that passes. If you want to play the channel, the proper buy would probably be at 30.81 and the target would be at 36.28. Cut loss should be done once it enters back into the channel.

As for CHINA, definitely the play is the cup with handle. If we were to base our breakout from the handle, as of this writing, the resistance is at 9.19, giving us a proper buy at 9.38, with a target of 18.19. Yes you read it right, that's a 98% potential return. But of course, this may take some 2 years.

So many choices, too little time to's your call.