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Highlight Stocks of Last Week

By Mike ⋅ October 27, 2007 ⋅  Email this post ⋅  Print this post ⋅ Post a comment

Last week was one of those weeks I would like to have back since many of the moves should have generated some serious size for me. There were lots of sell offs and many rebounds that you don’t see very often on the NYSE, but I suppose with the maturing of the Hybrid System we’ll begin to see many more of those crazy ranges usually seen only on Nasdaq stocks.

I’ve been recommending shorting the Mortgage insurers for almost 3 weeks now and I’ve been playing them daily ever since. I never really made much money on them until Friday since the moves were pretty eratic before then. If I was swing trader, I guess I could have made more but then I would have probably gotten out of that trade early too. Mind you, I usually don’t have a problem with getting out early since it’s always better to take a guaranteed profit then letting it get cut down to nothing but last week made me even rethink my strats.

PMI had a very nice reversal in the morning and I caught almost a point of it on the way down. I pretty much keyed of abk, mbi and cfc and went short aggressively. I caught some of MBI’s move down but it was very frustrating to trade since the stock was so choppy. I usually tell other traders I make at best 30 percent of a move but this time it was even less than that. I know that ratio sounds pretty bad but I’ve found going for home runs all the time will end your trading career pretty quick. Some traders used to call that trading with conviction, but most of those guys have been wiped out by now. I actually switched once to holding stuff longer and made 10 point a couple times, but then I had a long string of losses from which took a long time to recover. Only when I got back to trading within my comfort zone did I get back to profitable trading. Consistency is the number one gauge of your success if you want to make Trading a career. Even in daytrading, you have to think long term and look at the big picture.

Another stock that really was the disaster du jour last week was WCG which saw it’s price drop 73% after a raid by the FBI at it’s Florida Headquarters. A lot of the moves during the day were predictable but I only managed to get fractional gains out of it. Holding a stock like this can really get the old ticker pounding and let me tell you, everytime I took a position on this stock I started sweating and as soon as I got out of it I felt very relieved as if I had dodged the grim reaper that time. It really felt like gambling since so much was uncertain and any news could have moved the stock either way. My guess would be that it’s still headed down, but you won’t find me trading it until earnings on Nov 5th.

I’ll be looking for long entries on stocks in the mortgage space in the coming week. Most notable are PMI at 20 and WM at 28.8 but I’ll be posting more on others that have caught my eye before Monday’s open.