Lightening up,profit taking - or re-positioning for greater upside...
They all mean different things to different people; yet the all open up the same opportunities. Everyone has their own goals, pain tolerances, methods that work for them as individuals and most importantly; different individual portfolio's.
What has consistantly worked very well & profitably for me; is to use heavy margin (which I do NOT recommend to anyone who has not traded for 1 year+) to leverage sector, or individual stock moves.
If I had one idea to pass along to others; it would be that heavy margin leverage is NOT to buy and hold with - period. It is to use to temporarilly leverage moves, or runs and one had better worship , fear and honor the technicals for signs to take profits - and allway err on the side of being too quick on the trigger vs. being a tad too late...
I would venture to say that most who use margin also add to positions and buy with their "winnings" on these run ups. Unfortunately - run ups allways have retracements, where the individual stocks, or sector ususally must form a base before continuing with a new supported leg upward.
What I look for is opportunities to "leverage" these initial movement opportunities. Jim L is right; it amazed me that with what we KNEW the impact upon fundamentals that these commodity prices had, that OPEC would NOT shoot itself in the foot, that Oil prices would firm, if not even rally - post OPEC, that the sector would rally ala~ the "Deja Vu - all over again" concept; it did not take a genius to see; but those who did it now look like one (VBG).
What it did take was a willingness to cut back against the grain and leverage into a contrarian move;by buying and even leveraging heavilly prior to the OPEC meeting.
Where I differ evidently from many here; is that I still see plenty of opportunity to rotate, or pick up small caps , or laggards. By selling - taking profits here; I am locking in substantial gains; as the usual and customary pullback on merely profit taking (personified by the $5 intraday swing in RIG perhaps ?)can destroy, if not just break the hearts of traders by wiping out your magnificent gains overnight with 2:1 to 3:1 leverage.
Nothing is more discouraging than to "nail" a move with leverage; only to see 1/2 of it, or even all of it disappear at that same 2:1, or 3:1 leverage ratio on the pullback.
I sold ALL of my margined positions and a decent portion of my cash positions to take and to lock in tremendous profits.
Sometimes; I like to re-group, step back - review all the research, earnings estimates, look at commodity prices, compare the mo-mo movers to laggards, review how much accumulation has occured in individual stocks as opposed to their moves, look for OBV anomalies etc. I prepare new watch lists, new laggard lists and create new buy & sell limits.
These profit taking breaks have been effective and profitable about 85% of the time for me. Maybe I miss another 20% move in NBL EOG BR XTO UPR PXD ? But, I can re-buy RIG $3 today less than I sold it yesterday,FLC less and virtually everything cheaper today than yesterday. So, it is not as if opportunity sectorwide no longer exists.
What I sense may be a real opportunity was indicated by the major pullbacks in SLB & RIG - two institutional fav's here; if the overall market pulls back strongly - the widely held institutional fav's in the Oilpatch will get sold by Institutional holders and will create some anomaly buying opps. I am waiting for one in HAL right here. IF HAL comes back down to $37ish - it will be a gift horse 50% upside (a double on margin) buying opporunity. FLC here is also a glaring buy.
I am extremely confident that HAL PGO FLC will vastly outperform the OSX index from here to year end. Stockpicking here is what will make the big money.
Actually; what I have found is that these runs leave laggards that often explode - surpasing the gains of the continuation of the mo-mo leaders that I sold.
I've been adding to RGO all the way up here, its moving nicely, still way undervalued and is financially solid. I've broken my usual % of portfolio rules with it lately; but I use tight trailing stops all the way up; so I guarantee myself that I exit with a nice profit.
PGO is still a gift here and I will load the boat on HAL here on ANY & ALL weakness. I may merely be riding with only 1/3, or 1/2 of my UPR OEI XTO PXD etc. but, I now will be riding a valuation that I consider equally as cheap in HAL FLC & PGO. The mid cap E&P's rapidly closed the valuation gap here - as many knew they would. So now; on this retrace I get to reload and maybe even overweight back to key OSX plays like HAL FLC & PGO - which I see as having equal, if not superior upside to many mid-lg cap E&P's given the E&P breakout and the pullback/lagging in some OSX names.
The only subsector that I have maintained near a full position in, is the larger Oils- majors, mini-majors & integrateds as they have yet to close the valuation gap - allthough COCb did (VBG).
Bottomline - do what works best for you, we all have different pain tolerances and goals. Lots of ways to win this game and many roads to success.
Actually; sometimes there are even little surprise opportunities that your trading strategies can develop. I rode the breakout from $6 1/8 on FGH yesterday morning; I allway raise my stop tightly behind me on "breakout plays" - I got stopped out of 80% of my FGH position at $6 3/4's. As soon as FGH touched $7 - I set stops at $6 3/4's ; as I felt the stock could run to $8 yesterday potentially (i was looking for those 10K block of short covering - didn't happen however !?) - but, the sectorwide turn mid day stopped that. Now today; I have a nicely leveraged little pop in the bag; a still profitable partial position and now I can play FGH either way; long , or short off of the 10Q release.
Did anyone expect the FGH 10Q yesterday (VBG) ?
...timing is everything ~ You Freideholics just "aint" doing your homework, or using your prognosticative abilites very well...
I'd be carefull on margin here fwiw, lots of stocks much cheaper today than yesterday - so trimming made sense imho... remember a 5% little pullback is a 10-15% loss on heavy margin.
Looking to buy HAL PGO RIG FLC into weakness, or some at th the open off of yesterdays pullback; maybe add to UCL TX MRO on any weakness and fishing for more small caps...
... and FGH - hmmmm (VBG) - long, or short ? - interesting 10Q that the Yahoo boys just don't have a clue about, Sarge you straddled pretty well on your comments (VBG); we shall see... Close out a nice little trade at the open, buy the weakness, or chase & add the breakout if seen (anyone really expect a breakout (VBG) ?
Sarge , do you see a breakout, or upward move for FGH today (VBG)? - or, specifically did you see ANYTHING to "really" be excited about in that 10 Q? Liquidity issues better, or worse (or nightmarish) ? Does backlog matter if you can't make money on what you build, or deliver it on time ?
Only the nose knows... and I've allready got stops set for the remaining shares - guaranteeing a nice little pop yet again... JL had better have a "Come to Jesus" show stopper speech ready for analysts imo... I'd imagine the phones are ringing in Freidetown this am (maybe not for new orders however (VBG)- more questions than answers perhaps !
The technicals signaled a breakout on FGH - got a small one, pocketed 80% of it, nothing to write home about - but, the FGH gains long & short just keep adding up; and its not as if I missed the BOOM 2000 Train by sitting & watching the paint dry on FGH either (VBG). You Freideholics need to learn to "hit & run" - use guerilla trading tatics. You can make 80% of the money on FGH only being "in" - 5% of the time... |
