December 27th, 2007 Review
TIM $14,509 (up $105 on the day)
Bought 200 shares of ESLR @ $18.39, Still long shares of 150 SWIM
Solar is hot yet again. When I wrote this AOL article about (Nasdaq: SOLF), it was just under $29 and yes, now, just two trading days later when it
s up nearly $9/share, of course I wish I’d held (so stop emailing me and rubbing it in!), but hindsight is easy. Predicting the breakout was not difficult and it was not luck. I saw the volume ramping, the stock break its trading range and close strongly. I simply didn’t have the conviction since I suck at going long. Which brings me to my buying 200 shares of the latest solar play that was exhibiting THE EXACT SAME PATTERN (Nasdaq: ESLR) today at $18.39.
You see, I’m a pattern day trader, not in the sense the SEC means (exhibiting a propensity to day trade) but in the sense that I don’t naively try to judge these POS companies on valuation (if I did I’d would’ve shorted them all 70% ago and lost everything, aka why it’s so damn tough to be a short seller who focuses on valuation), but because I trade based on these chart patterns. I don’t try to predict fundamental events. I don’t even try to predict technical events. I wait for the patterns to develop and then I look to strike. It’s an adaptation game, not a prediction game and that’s why I’ve been so successful. When I ignore the patterns and try to use my brain, that’s when I’m unsuccessful. As detailed in my DVD and in these charts, each pattern has specific variables and it’s through the understanding of these variables that makes you, me, whoever a better trader – because the patterns are always a changin’. (aka why it’s useless to just memorize patterns as soooooo many BullShippers out there try to pawn on unsuspecting traders)
Yesterday, I said I’d buy ESLR on the breakout of $18, but when that breakout occurred in the morning, it got a bit more complicated. The stock was already up a ton, thus rendering the $18 mark near meaningless. See I didn’t know it was going to be meaningless, but the price action told me so as it bounced around there for nearly 4 hours. I bought on the afternoon breakout at $18.40, a pretty good execution, even though said breakout failed for nearly 30 minutes. Maybe $18.50 was the true breakout. Who knows, all I know if I waited for the afternoon breakout, and the stock, despite all the obvious selling and short selling, got stronger throughout the day to close at $18.84. Sure, it trades at a ridiculous 25x sales, but the 17 million shares sold short must be panicking because this is a bonafide, intraday, intramonth, monthly, yearly, 2-year and near-all-time breakout. Can you say cup and handle? As long as the volume keeps up, it should get to $20 tomorrow and then its anyone’s guess as to whether or not it can break it.
Sure, there’s plenty of other solar stocks on fire today (Nasdaq: CTDC) was up 70% (even though they seem to have just changed their business around in order to partake in all the solar fun)—thought about buying for the probable gap up, but that’s just too risky a stock for me.
(Nasdaq: CSUN) was another solar play on fire today and I really wanted to buy that for the gap up, but I was disciplined enough to wait to buy near the close and by that time, the stock had already run up $1.50 in the last hour, rendering it too risky. (ESLR, on the other hand, was nice and gradual, aka short sellers haven’t panicked yet). CSUN’s up $1 after-hours, compared to ESLR’s mere 30 cent gain, so maybe I shoulda gone for the home run, but going long really scares me, so I like taking it slow (somewhat).
Other solar plays I was looking to buy near the close (Nasdaq: DSTI) – other than today, too ugly a chart for a solar play, aka something’s not right with them) (Nasdaq: SOLF) – already up too much over the past few days, (Nasdaq: HOKU) – up too much ($1) in the last few minutes before the close and non-solar play (Nasdaq: MELI) – up $2 into the last hour before the close and too expensive.
These solar plays are gonna make for some great shorts in the next few weeks, but remember, they can go further than anybody thinks possible. Right now we’ve got the stupid holiday crowd involved and they don’t know about short selling, they just wanna get rich quick so they’re buying “into the future of clean energy”. LOL. I don’t care that (Nasdaq: FSLR) trades at 105x sales, the chart is a perfect breakout/uptrend, so unless you’ve got deep pockets, you’re gonna get squeezed. Fundamentalists can knock technicals all they want, but when you trade a stock, you only make money due to the price action. I hope FSLR goes to $300+ you stupid short sellers!
(Nasdaq: SWIM) – nice boring gradual rise, a penny an hour it seemed like. 24 days left until I can sell, LOL
(NasdaQ: SVNT) Keep an eye on SVNT, it just keeps goin and goin, gonna make a nice short one of these days when THE PATTERN SAYS SO
So, bite me you “What’s the Fed gonna do?!?!?!?” CNBC viewers. Timmy don’t play that game.
Posted in AOL