10-29-2013 Trading Journal

The market gapped up and went up up and away.

While the market was going up, I was getting slapped and kicked at.  First off, $KNDI kicked me down below by trading up and then dropped like a rock.  I immediately sold 64% to reduce risk and cut losses.  I was premature in buying back my shares yesterday looking for bounce.  And when price hovering around low $7, I got sick feeling that it would break below $7 and triggered a bunch of stop; therefore, I sold the rest of my position above $7.

As predicted, price dropped below $7 and quickly traded down to $6.8x.  I didn’t want to buy then ’cause I didn’t know why there were so many sellers.  My major fear is another round of dilution coming.  After all, they have just paid for the 50% partnership; I’m always wonder where they get the rest of the money to pay payroll.  We won’t know all this until the next earning report.  If I’m think this, perhaps others are too; hence the selling.  I decided not to buy the shares back today and see where it will go tomorrow.  For now, I’m flat on the stocks but I still have some call options on the Dec $7.50 call and the March $10 call.  These should cover me in case price shoot up without me.

Next, I got slapped on the face for being stupid and not following my own words.  I had carefully rebuild my $CERS position for the last few days and I gave it all up by selling 62% of my position today when price took out yesterday low.  As it turned out, I sold at the low of the day.  While I made a promise not to get rattled by this one and to hold on it for long-term.  My old habit of selling when price took out previous day low just turned me into an autopilot.  Without thinking, I just clicked my buttons and sold.  One more click and sold.  Then I realized what I did.  “OOP!”  Obviously, if I was to buy back my shares, I would be chasing it all the way up.  I wait and wait for the price to come back down but it didn’t.  It kept going up.  Finally, I gave up and just bought most back at a much higher price.  I’m still out 31% of my original position.  Let’s see if I can get them back tomorrow at a cheaper price; however, I’ve a feeling that I may have to buy them back above $7.  Oh well, if that is the case, it is what it is.   You see, if I’m expecting $20+ or higher on this stock, who care about 50 cents premium.  Now, if I can remember this the next time my finger is on sell button…   Btw, you know all my rambling here on $CERS are due to the benefit of the hindsight, right?  If price had dropped instead of going back up, I’ll be having a different form of discussion…

In summary- bottom line-> forget the price you buy for entry or re-entry, the KEY point is to catch the momentum on the right direction and make money.  Thus, if I have to pay above $7 to buy the shares back if I see momentum will continue to $8, I’m game.

There were a big buy at $2.80 for $NCTY so I followed alone and added some more myself.  So far, this is still an instinct play.

$GALE traded down but  due to my strong conviction, I wasn’t concerned.  Now, I should be “feeling” the same way with $CERS but I couldn’t ’cause price was too high relative to $GALE.  And when price shot up with high volume back to the $2.2x area, I decided to add more for better day ahead.  Take a look at the daily chart below:

Gale_daily

Did you see the hammer candlestick?  That was a very good looking “potential” bottom reversal pattern.  All price has to do tomorrow is to take out today high.

Now, there was one more slap to my face here.  I just read that the FDA has rescinded the ANCHOR study special protocol assessment agreement.  Oh Great! One more bucket of cold water over $AMRN head when it was still down on the ground.  After hours price is now down 16%.  Would I sell my shares tomorrow to cut losses?  I was going to but then I decided against it.  You know why?  ’cause now no one has to wonder if FDA will go against the Adcom recommendation by approving Vascepa for Anchor indication.  That boat has sailed and we all now know that FDA will NOT approve on Dec 20th.  So why wouldn’t I sell then?

Remember, I bought back $AMRN not for the slim chance of possible approval but for the possibility of a buyout or partnership with BP.  With the Dec 20th being a forgone conclusion of a “no” answer, $AMRN should be able to entertain a buyout now before Dec 20th if there is such an offer.  No more waiting to see what happen in Dec 20th first.  So, I’m going to take the heat of the loss tomorrow and wait for the possibility of a buyout.

Due to the drop in $KNDI, $KGJI,and $AMRN price, my portfolio took another small hit.

Current holdings:

LRAD, AMRN, GALE, TINY, CERS, KGJI, NCTY, CLIR, APRI and 24% cash.

My 2 cents.



Categories: Daily trading Journal

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