Steve's Trading Diary - September 2006
9/27 Bought JRCC as it opened higher. It did close lower but stayed above our $10.60 stop. This one needs to see positive trading on Thursday. Use a close below $10.60 as your stop. We want to see it start moving higher. We're anticipating a Scoop pattern in the formation. 9/28 It did a Doji-type day on Thursday, continue to hold. Now use a close below the $10.17 level, the low of the Doji, as your stop. At this point we should see aggressive buying from here. 9/29 It's still trading indecisively. If you own it, continue to hold and use the $10.17 level as your stop. Buy it aggressively on any positive trading. It's trading in a flat trading area, look for the buying to come in. 10/2 Continue to hold, it traded up slightly on Monday. You can still be buying this one on strength. Use any trading or any close below the $10.50 level as your stop. We would like to see it possibly bounce back up to the 20 day moving average. 10/3 It was trying to form a bottom but closed below the support level of $10.50. This one should have been closed out on Tuesday on the close.
9/29 Bought EBAY on the positive trading on Friday. Even though it closed as a Doji, it is still in a very strong uptrend. Continue to hold but now use a close below Friday's low of $27.97 as your stop. A close below that level, which would be at approximately the halfway point of the previous candle, would form a Evening Star-type signal. This would mean there wouldn't be very much strength. It needs to trade relatively flat or slightly higher to continue to hold on Monday. 10/2 It should have been closed out on the close as it closed more than halfway down the previous large candle. It closed right on the 20 day moving average but you should be out of it and waiting for the next buy signal. It formed an Evening Star-type signal right at the resistance level. It didn't break through like it should and start up with new strength. This tells us that we should be out of the position and move on to something else.
9/27 Bought OII as it opened higher on Wednesday like all the oil stocks did. After an Inverted Hammer, a Hammer, and a Bullish Engulfing signal, with the stochastics coming up, it gave us enough evidence that it would start to move higher. Start watching the 20 day moving average as the first level of resistance. 9/28 It continued upwards and traded nicely on Thursday. We're still anticipating the first target to be at the 20 day moving average. At this point we would probably use a close below the open of Wednesday, at $30, at your stop. If the buying is still in this uptrend, it should not be coming back down to that level. 9/29 It's still trading up but notice how it's running out of steam. Now use a close below Friday's low of $30.41 as your stop. 10/2 It closed exactly where we anticipated it would. It closed below the open of Friday and formed a Bearish Engulfing signal after a few days of weakness. This one should have been closed out on the close of $30.40 on Monday, just below our $30.41 stop.
9/26 Bought RMBS on the positive open after the Abandoned Baby signal. Notice that it came back down, touched the 20 day moving average, and came back up a little before closing. It still has a good possibility of opening higher and heading higher on Wednesday if the markets show strength. 9/27 It traded up slightly on Wednesday. It had been trading higher. It's still staying above the 20 day moving average after the Abandoned Baby/Morning Star signal. Give it a couple of more days. It should do some more positive trading with a wave 1, wave 2, and a strong wave 3. 9/28 It came back down and touched the 20 day moving average again and came back up off of that, continue to hold. At this point still use a close below the 20 day moving average at approximately the $17.50 level as your stop. 9/29 It backed off with the weakness on Friday. It's trading right on the 20 day moving average. We should have seen buying coming in. If we don't see it bounce off the 20 day moving average on Monday and start moving higher, you will probably want to close out the position and look for the next buy signal. If it opens lower and starts trading down, close out the position immediately.