The Trend is your Friend, but a Trailing Stop is your Best Friend!

I had a mixed feeling on the current bull run. I was definitely happy that my stock went up(of course who wouldn’t be?), but at the same time I was apprehensive of the movement.

Generally, I was apprehensive on the whole market as from my last analysis, the market was overbought, with lots of stocks already breaking their resistance and reaching the RSI overbought line a week ago. I expected that any upward movement for the week that passed might just be some form of a last salvo from the bulls. I was expecting a correction, and I was expecting it to hit hard and fast just as the bull run did, that’s why I am very apprehensive. I was afraid that the profit I now have might just be snatched away by a sudden correction. I had two options, sell once my target price has been reached or try to maximize my profit but with the risk of being caught in a selling stampede during the correction.

But last Saturday night’s EB took my worries away. I got reminded of the phrase, the “Trend is your Friend”. A stock movement that is trending upward is your friend, and you just would have to ride the trend.

The next question I had was, how would I be able to confirm if the Trend is really my friend? As what Danny has emphasized time and again, look at the volume!. The volume would tell you how true your friend is to you. Commenting a line from Wilson, “if there is volume there is a commitment”. If the upward trend is accompanied by large volume, it confirms that the upward trend is not likely to return to the take off level. Because there is a large volume accompanying the trend, there is a large confirmed commitment from the new owners that they are not likely to sell the stock at a price lower than their buying level.

But…even friends become worst of enemies… I wouldn’t discount the possibility of a trend encountering a correction; of course it’s not a perpetual upward trend. If the Trend is your friend, then a Trailing Stop is a Trader’s best friend! If you’re a Maverick trader who likes to maximize profits way beyond a target price, then I suggest that you start to be-friend the Trailing Stop. A trailing stop saves you from a back stabbing Trend friend by protecting your profit. Too bad my current broker, a Broker Persistently Inaccessible, doesn’t have a Trailing stop facility. If it did, I wouldn’t be apprehensive of maximizing my profit. But come to think of it do other online trading systems have a trailing stop?

Hurrah to the Trader Central EB Organizers!!!

I attended the Trader Central EB last Saturday night and it was definitely a great success. On the moment I stepped in the EB area, I was welcomed with a great smile from no other than the First Lady of Accord Capital, Madame President Shirley and of course the friendly pipol from Accord (I think they were the marketing officers). I was able to catch only half part of the program coz I came in late (sagabal talaga sa gimik ang trabaho!). But even though I was late, the half part of the program was still very much informative.

The night continued with the analysis of PHISIX and some stocks, by request from the attendees. The veteran traders Danny, Bonner, and Miko were there to give their personal analysis on the stocks.

The night was also the launching night of Accord Capital’s online trading platform www.philstocks.ph and this was introduced by no other than the main Techie man from Accord, Rapi.

At the end of the night I got to chat with my fellow El Dorado batchmates and we got to conclude “na Sulit yun pag attend ng EB”. Of course sulit na sulit, El Dorado Members got to pay only P100, courtesy of Accord. And for that amount we got, a dinner, plus lots of freebies like personalized cap, mouse pad, snacks from Stateline Foods (courtesy of an El Dorado member from Batch 5 or 6? sorry sir wasn’t able to take down you name) and cardboard fans from Inquirer courtesy of “Guyito” and “Morrissey” (it was one of the freebies that I got to immediately use, that night was a little bit humid, so the cardboard fans were definitely handy). The greatest freebies of all…were the analysis and personal recommendations from the Masters of TA.

Thanks and congratulations to Accord Capital and to the organizers of Trader Central for a great EB. Definitely looking forward to the next EB. Boss Bonner, sa hotel na ba yun susunod na EB? Sagot mo? hehehehehehe….. =)

Inretrospect (April 23-27,2006) PHISIX,DMC,PX/PXB

PHISIX

On my last analysis, I expected PHISIX to correct and it did the past week. It plunged to the support level of 2225. What I did not expect was for it to bounce back and break the resistance at 2260, the previous week’s high. I guess a lot are still bullish.

DMC

In my last analysis, I expected a correction and it did happen for only a day with a significant expansion on the downward movement. But a lot are still bullish with this stock that it had 2 consecutive gap up on the middle of the week accompanied by large volume. I’d like to conclude that the highest level can be considered as an island reversal, but the volume suggests otherwise. I still maintain a cautious stance on this stock, as it is still very much overbought.

PX/PXB

Looks like this stock is now confirmed to be on its way down. RSI still confirms an overbought level and MACD has started to move down the signal line. I still would like to maintain a cautious stance on this stock.

Bret The Hitman Hart Rules!!!

It has been a long…long….loooong….time since I watched a wrestling match. Believe me, it was too long that the last time I could remember, I was still rooting for Bret the Hitman Hart, the BushWhackers were still battling it out against the Demolition team and WWE was still called WWF. I got re-aquainted again with wrestling this past holy week coz a nephew of mine was fanatically watching Wrestle Mania 22. Ofcourse not to my surprise, Bret is now just in the annals of wrestling history together with the Ultimate Warrior. But what surprised me most was that the Hulkster was still performing, still clad in the signature red and yellow costume (not to mention the kungfu master mustache and beard). He sure doesn’t know when to retire.

There were still some old faces from the yester years that I could identify like the Under Taker (just had a 14-0 stat in the casket match =p ),Shawn Michaels, Vince McMahon, Rowdy Piper(yes..the Rowdy Roddy skirt wearing Piper). The rest are new to my ears.

StockWatch (April 24-28, 2006) PHISIX, DMC, PX/PXB

PHISIX(Chart:Daily ** Support : 2220-2240** Resistance: 2390)

PHISIX is near the red line as RSI approaches the 80level. It may still kick up some points but I expect a correction any time this week as I have observed that a lot of stocks has already reached overbought level.

DMC (Chart:Daily ** Support: 3.6 ** Resistance: 4 )

This stock is dangerously on the red line. It has now reached above the 80 RSI overbought level, so I expect that by this week a correction would occur. Price may head down to the 3.6 level.



PXB/PX(Support: 3.4 Resistance: 4.3)

PXB/PX has started to move downwards from the overbought level. I expect support at 3.4 near the 61.8% Fib Retracement.