Review of trades this week (23-27 June 2008)

I came back from my overseas trip last week and went over the charts. My initial feeling was to look for stocks to short. But going through the charts I just saw the very oversold market situation going into the FOMC meeting and thought it was better to bet on a short term bounce.

My time frames for trading are getting shorter. This has to be the case if trading is to fit into my future plans.

Anyway here's a review of my trades this week.

1) COSCO
BOUGHT 2 lots 15 May 2008

Long
Entry price 3.51
30 day ATR 0.2
1.5X ATR30 0.3
Cut loss stop on 1.5ATR30 3.21
Recommended cut loss 3.23
Loss on recommended cut loss -607.7810732

Target price 3.89
Profit on target price 707.540068

Reward/risk ratio 1.164136396

Last done price = $3.22
Paper loss = -$634


This trade should have been cut out long ago during the time I was in Canada. Anyway I'm probably going to just hold this counter as it has not had any real bad news and is holding up pretty well so far. $3.10 seems to be the support. Volatility in this counter has also come down tremendously so this is not a counter on the top half of traders' radars anymore.

As a result I've decided to adopt a buy and hold strategy for this one. I'm still betting oil prices to have a sharp correction and stocks like COSCO are bound to benefit. There are many "good skeletons" not out for this stock. Eg their proposed increase in stake of the shipyard, new orders etc. When those do come out it will be positive.

We'll have to wait and see.

2) UOL

Bought 3 lots 23 June 2008 at 3.42

Long
Entry price	3.4
30 day ATR	0.08
1.5X ATR30	0.12
Cut loss stop on 1.5ATR30	3.28
Recommended cut loss	3.24
Loss on recommended cut loss	-550.6082328
Target price	1.63
Profit on target price	824.500233
Reward/risk ratio	1.497435352

One of those really oversold counters that had broken support levels. RSI super low and UOL seldom stays that oversold for too long. Remember I'm talking short short term here. Not talking about trends. Trend is still down. But my tools make me feel more comfortable doing long trades at the moment.


Again looking for rubber band trades.

Anyway sold it off at 3.51 on 26 June 2008.

Sold 3 lots at 3.51
Profit = $185

3) Wing Tai

Bought 5 lots (should have bought 10!) at 1.49 on 23 June 2008

Long
Entry price	1.5
30 day ATR	0.065
1.5X ATR30	0.0975
Cut loss stop on 1.5ATR30	1.4025
Recommended cut loss	1.4
Loss on recommended cut loss	-551.396555
Target price	1.63
Profit on target price	594.5271665
Reward/risk ratio	1.078220676

Similar picture as UOL but even more oversold and below NAV! Was always due for a bounce going into the FOMC meeting.

I also look at these indicators to look for rubber band trades.

Sold 5 lots on 26 June 2008 at 1.57
Profit = $337

3) Allco Reit

Bought 10 lots at 0.78 on 25 June 2008

Long
Entry price	0.78
30 day ATR	0.02
1.5X ATR30	0.03
Cut loss stop on 1.5ATR30	0.75
Recommended cut loss	0.75
Loss on recommended cut loss	-354.232227
Target price	0.87
Profit on target price	841.514265
Reward/risk ratio	2.375600527

Allco Reit is a counter my good friend and trading buddy has done a lot of research on and his assessment is that the stock has very very good fundamentals (he was a FA guy before he turned TA after Chinese New Year)

Anyway I've been watching this stock for a LONG time now. There was the news that the parent company Allco was in financial difficulty and the stock tanked in January. And there was the news that they might have difficulty refinancing their loans in March. And in May there was the news about their Moody's rating drop. And each time the stock just went up again. This is one of those quiet quiet stocks which are not trader's cup of tea. But I've been watching it for so long and seeing my good friend make money that I decided once and for all to just join him. In any case it's a REIT! REITS are going to be good during bear markets. I won't go into the fundamentals but briefly Allco Reits owns buildings with office rentals. And rental rates have gone up (although won't be going up so soon). But look at the Allco chart and you know how far it has dropped. At most just collect dividend. REITS will be defensive counters and Allco is one of those quiet ones that has little or no coverage. Shhh...dun tell too many people ok?

In any case I'm quite confident we'll see a bounce for Allco Reit as well. In the POEMS CFD this is a long only CFD. So not so much on shortists' radars. It is also trading below NAV liao.

Can lah.

Last closing price 0.76
paper loss = $-263

Total realised profit/loss = $3565 +$185 + $337 = $4087
Unrealised profit/loss = $-634 - $263= $-897

Update on AllcoReit

Allco Reit today closed to confirm a busted descending triangle breakout downwards pattern. The close was above the downsloping trendline today. This after there was a breakout downwards of the base of the triangle last week which was <10%.

There was low volume before these breakouts.

Measured target is 0.905 but note the HCR from 0.865 - 0.915.

It is interesting to note that statistically busted descending triangle patters give a rise of 60%. Using 0.80 as the breakout price the statistical target is 1.28! DBSVickers just had a report with a TP of $1.23.

There is a necktie of the 25 and 50 day moving averages at 0.805. Support levels will thus be 0.805 and 0.775.

With the news of the loan refinancing done, there isn't much bad news on this counter for the time being. If the market continues to rally this will follow.

Allco-reit

I have a friend who holds Allco-reit stocks and he alerted me to this stock today.

We discussed this and it was very interesting because he knows a lot about the stock's fundamentals.

From the chart we can see that there is a descending right angle triangle pattern. Today the stock price broke out of the support of 0.775. It is currently at the time of this post in the HCR of 0.72-0.76

What will happen?

We were thinking about this and initially I contemplated buying this at 0.74 as the fundamentals are good despite recent news. But I looked at the charts and they tell the truth.

In any case I think that we might see a double bottom formation pattern on this one over the next day and early next week perhaps.

The support right now is at 0.72 (lower end of the HCR). After it gives way it might be a shorting opportunity all the way down to 0.68-0.645

A double bottom will then form and we all know the confirmation level is for the stock to break 0.87 and then the measured target would be 1.09 (but note the HCRs beyond 0.87 which are not shown on the chart I posted above)

After soem reading I also realised that there is a formation called the "busted move" pattern where the descending right angle triangle has a breakout downwards only to recover and then break the downsloping side of the triangle. And this usually results in a very powerful move up!

Statistically downward breakouts happen 64% of the time. The rise is on average 47% after a busted move!

So which will it be?

I'm betting on a double bottom move. I'll probably buy in at 0.645-0.68 and ride this up. Let's see.....