The Day that Was - July 19th 2007

A good day for the RebelTrader portfolio. This morning I entered a new swing trade on NightHawk Radiology (NHWK) at $19.40 (1/2 position to start with). NHWK continued upward throughout the day and closed the day up 7.4% ( up 3.9% from my entry point). I had NHWK on my watch list since Tuesday and today it performed very well and met my buy point. I will monitor NHWK for the next entry point for the remaining 1/2. With the big gain today I expect to see some pullback on profit taking but I don't see that lasting too long before it continues up again.

Today I sold NetGear (NTGR) because I saw what was starting to look like it was topping out. That means that there just was not enough buyers left to out number the sellers and that we were going to end the day with a doji (doji: The name given to a chart pattern which signals indecision). With that trading pattern developing I decided to take the gains and close the trade. NTGR provided a 5.1% gain in 10 days. Remember that it is not important to squeeze every penny out of a trade, what is important is that you have more winners than you do losers. Don't focus on how big the gain is, instead focus on keeping the losses small. The gains will add up.. Every gain is a winner!

I said this morning that I would watch PDGI to see if there was any chance of a recovery and the trading did not show it was going to recover so I closed the PDGI trade to keep the loss in check. PDGI closed with a loss of 6.2%. The sector just did not gain enough strength to lift PDGI.

Today WWAT continued strong buying in the morning on very heavy volume. But I know from experience that it would not be long before profit takers would step in. After a 25% advance in just two days there would be a lot of profit takers. So I waited for the buyers to continue to buy up WWAT in the morning and then I sold 1/2 of the position at $2.39. That was a 30% gain in 7 days from the first buy point I entered WWAT. The profit taking increased as the day went on and that is OK, that was expected. I am holding onto the remainder of the shares for the next buying surge. That may not happen right away but if it does then I'll sell the remaining 1/2 on the next upward move. I have set a stop loss on the remaining shares at $2.15 (even if the price comes down to that point and my trade is closed it is still a profit on the remaining shares!). At the end of the day the remaining 1/2 of my swing trade is at 14% average gain.

My swing trade in GRP also advanced well today and that trade continues to do well. Same with WDC, and after the market closed today Seagate (STX) reported their earnings and they were good. This should lift the disk drive sector and WDC with it! WDC was trading up another 1.8% in after hours.

BIG finally got some buying today and started lifting that swing trade back up. I'm watching it closely.

Some news on the earnings front. Google reported their earnings after the market closed and for the first time ever they missed the analysts estimates. They missed by 3 cents on the EPS. This sent shock waves through the Google investors and a massive sell off took place. At one point Google was down almost $50 per share (8%). This is a large event, never has Google missed their earnings and this will certainly put the brakes on Google bulls. This will have a substantial impact on the internet sector. In sympathy with Google; Baidu (the Chinese search engine giant) (BIDU) was also trading down in after hours. What we are likely to see now is analysts will downgrade Google, this will further push the share price down in the near term I feel.

SanDisk (SNDK) released good numbers and investors were happy as in after hours the trading was up 6.5%. This will help the PC hardware sector, and may even rub off a little on my Western Digital (WDC) trade.. :)

Microsoft (MSFT) released their earnings also and they were fair. The market responded with mixed reactions and in after hours was trading down 2%.

The financial sector today was still a speed bump for the bulls. Kind of like driving a car with one foot on the gas and the other foot on the brakes. That is what the rising oil prices is doing to the markets. We are now near $76.00 for crude oil/barrel.

I'm keeping my eye on SCUR. This is a stock I mentioned yesterday. It is nearing a buy point when it crosses above the trend line.

On Monday I posted a chart for Apple saying that I feel the $140 price was going to be difficult to break. Today Apple tried to break above $140 but it could not hold the gains and came back down to close right at $140.00. And in after hours trading Apple is down to $139.00. If you look at a chart for Apple (candlestick chart) you will see what we call a gap up doji on lower volume. That is more often than not a signal of upward buying pressure being exhausted. In technical analysis the chart says Apple will pullback now. Eventually Apple will resume a new upward run but not right now according to the chart.

Good day to be a Rebel !

NetGear (NTGR) Update

NetGear (NTGR) is starting to look a little 'toppy' to me. In other words it has the markings of losing steam. The best traders always will sell into strength and not risk losing the gains.

I'm selling NTGR here and taking the gains. There might be more left in NTGR but the chart is telling me to take profits here.

Swing traders capture the quick gains and move on. NTGR has given me the quick gain and I will free up a trading slot with this sale.

NTGR was a good trade. Now time to put those profits to work into the next swing trade.

NetGear (NTGR) & Western Digital (WDC)

Both posting additional gains for the Rebeltrader portfolio. BIG is trying to stay green. Not giving up on BIG just yet. GRP also posting more gains to the portfolio this morning.

The day that Was - July 17th 2007

Sub Prime made the headlines again after the market closed. It is being reported that a comment made by Bear Sterns is that two of their hedge funds with ties to the sub prime mortgage business are now essentially worthless. Reportedly now worth less than 10 cents on the dollar. I said last week that we have not heard the end of the sub prime woes and I'll say it again here. The sub prime problem has yet to fully propagate into other areas/sectors. There will be more headlines concerning sub prime in the months to come.

The financial sector needs to be watched closely as it is a heavyweight in the markets. Where the financials go the rest of the market follows in time. We must get some good earnings reports from the big finance giants in the coming days and weeks to lift the sector. Today there was profit taking ahead of what I see to be apprehension on the part of the traders of more bad news on the financial sector front.

Today On2 Technologies (ONT) hit my stop and my trade was closed automatically. I sold my shares at $2.55. A shame too, because I am still bullish on ONT. But rules are rules, discipline in trading is the ONLY way you will survive and win the game for the long term. If you never set limits (stop loss) for your investments then you are on the road to a financial disaster, for you are relying on hope and not a plan. All winners on Wall Street will tell you the same thing, they have a plan on when they exit their trades/investments, no ifs, ands, or buts. Preservation of capital comes first.

Remember that you have to earn more gains to make up for your losses. Lets say you have a stock that you bought at $20 a share last year, and the current price is $10 a share. You have lost 50% of your money on that investment. Now in order to get your money back (break even) that stock now has to increase 100%. That is why the experts and pros always cut their losses quickly and within a set limit. It is easier to make up for the loss if your losses are kept small.

RebelTrader portfolio swing trade BIG (retail sector) is lagging. But looking at the sector chart I'm seeing what is looking like a bounce coming soon. So I'm still bullish on BIG as long as the sector is still bullish which it is, just in a pullback currently. The $RLX chart is telling me a rebound is near.

RebelTrader portfolio swing trade Western Digital (WDC) is in a good spot right now as that sector is in a breakout mode. Will keep WDC for as long as I can squeeze a gain out of it. NetGear (NTGR)is also on a good run and will keep an eye on it so as to not let the gains slip away if the broad markets turn sour.

GRP, the oil service sector company is set to rebound according to the oil services sector chart. I'm watching the $OSX and I see a bounce from the moving average to be the most likely event to happen.

The remainder of this week will be wild in the markets I anticipate. Be sure to have a seat belt on! Any bad earnings reports from large companies are going to be felt in the markets more than usual.

Mid day update

The late morning - early afternoon trading has been essentially sideways. Currently the major indices are holding up well so far. Rebel Trader portfolio swing trades NTGR and WDC are up nicely.

But things won't be quiet after the market closes.. Today after the market closes we will be getting earnings reports from Yahoo (YHOO) and Intel (INTC). One thing I am concerned about regarding Intel is that the price has been running up the past few sessions in anticipation of a good report. This often leads to what is called "sell the news". Even if the numbers are good those that have been buying it up ahead of the numbers being released will sell off on the influx of new money coming in. It is always a battle with existing holders wanting to cash out and new buyers (who were waiting for earnings numbers to come out)wanting to buy in. Many times the numbers of sellers outnumbers the buyers in the short term and the stock price falls. If you ever watched a company release very good earnings numbers and then wonder why the price fell afterwards it is because of the "sell the news". Another way to look at this is that the numbers the company releases are already "priced in" the stock by the time they are released.

I wrote an article on "sell the news" some time ago, I will try to locate it and post it to the board tonight.

Current open swing trades

Most of my open swing trades have opened to the upside this morning. NTGR is performing very well.

BIG has been basing around the original buy point. This stock is not catching the retail wave yet. I'm sticking with it until I see a signal that says it is not going to make it.

ONT has pulled back to the support range. Each time ONT pulls back to around the $2.60 area then some big trades go through on an uptick. Other traders are seeing this $2.60 area as a key support as well. I'm holding onto ONT

WDC is catching the beginning of a tech rally (albeit still weak). My entry on WDC could not be more perfect to take advantage of a tech rally. If Intel reports good numbers when they release their quarterly numbers then expect to see WDC and NTGR to be lifted up as well.

Pre Market - July 17th 2007

We have some good earnings reports coming out this morning so far. JNJ beat estimates, Merrill Lynch beat estimates, and Coca Cola beats estimates. Early the futures were down but started turning upward after earnings reports were being released. The financial sector (which was a drag on the market yesterday) is today looking better. With the good earnings from Merrill and an upgrade on American Express this morning I'm looking for a rebound in the financial sector today.

Current RebelTrader swing trade NetGear (NTGR) got a boost this morning from JMP Securities. JMP says this morning that demand for NTGR products has been exceptionally strong.

We are waiting for the June PPI data to be released at 8:30am. We will see a move in the futures following the data.

Portfolio Question

Daniel..



Thank you for your compliment on the trades. To answer your questions:


AMX

• Entered on 7/3/07 @ $63.31 (1/2 position)


• Added remaining 1/2 @ $65.16 on 7/5/07


• On 7/9/07 the Mexican Government announced they wanted to crack down on large companies which they felt held a monopoly on the business. AMX was one of those companies named. Because I did not know what the reaction would be I raised the stop loss point to $63.90 (I did this because I wanted to protect the capatial put on this trade in the event there was any big selling on the news. There was and by the end of the day my stop out point was hit and the trade was closed. AMX has since recovered well but one can not predict the future of what the news impact would be so discipline always comes first over hope. I did not want to hope the stock would revover and instead stood by the discipline of protecting the capital.) Recall the chart I posted on AMX when the news was announced by the Mexican Government

GRP

• Entered on 7/6/07 @ $55.54 (1/2 position)


• The second buy point (on the move to new 52wk high) not reached yet. So the average cost on GRP remains at $55.54

WDC

• Entered on 7/3/07 @ $20.37 (1/2 position)


• Second buy point not reached yet (see chart)

NTGR

• Entered on 7/9/07 @ $ 38.61 (1/3 position)


• Added additional 1/3 on 7/11/07 @ $ 38.97


• Average cost is currently $ 38.79

WWAT

• Entered on 7/12/07 @ $1.83 (1/3 position)


• Average cost is currenly $1.83

Rebel Trader portfolio status

Today AKS is up nicely on the strong metals sector, NTGR is up on a breakout into new highs, ONT is accumulating here and is ticking up ever so slowly but looking good so far, BIG is still above the original buy point and is still collecting large buys going through the tape, GRP is also trading up and I am still bullish on the oil services sector, WDC is also holding on even after the big fall yesterday. The tech sector is doing fairly well considering the overall bearish worries of the markets right now.

Only holding not doing well this morning is JSDA. Down 3.7% on what I can assume is a lack of confidence in the company from comments the CEO made on CNBC last night. I was prepared to sell early and not wait for the stop loss point if I saw any panic selling on JSDA. It is down but I don't see any panic, and it is holding above the stop loss point through the morning. So I am giving it a chance.

NetGear (NTGR)

I posted yesterday the next buy point for adding to the NTGR swing trade was on the move above $38.95. I hope you were watching as it has been advancing nicely this morning. The rebeltrader portfolio has added an additional 1/3 swing trade funds to NTGR @ $38.97

Fp80

NetGear (NTGR)

Yesterday I took a 1/3 entry on NTGR on the move above $38.61. If the price advances above $38.95 add the next 1/3 to the position.

NTGR - Long @ $38.61

1/3 position for the time being.

See the NTGR chart in the public chart list.

Market Update

Broad market is still "sluggish". Keep in mind that the DOW is coming close to resistance again. see the DOW chart in the public charts list:

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID2147404

Today kicks off the earnings period. If we can get some big names to report better than expected numbers this may give us the extra boost we need to climb above our trading range and get the markets moving again.

JSDA is above $17.00 but I am not going to do anything with it until I see it "close" above that point.

I like Netgear (NTGR) and may take a 1/3 position on the move above today's resistance which is $38.56. If it moves up beyond that point I will scale in with a 1/3. I'm being a little extra cautious only because the broad markets seem to be undecided here. And the fact that we are getting close to resistance again on the indices.