In a day like today after a strong runup based on real news, things can only go one way - up. This however says nothing about the consolidation which already have occured 15 minutes after open today. A lot of the drillers never recovered to their opening high, which was also intraday high. Again - for those who haven't learned - don't buy at the open when there is a strong positive news. The smart people sell at the open in times like this and buy back later in the day.
Why I see further up from here? A lot of stocks have broken into higher ground not reached since the beginning of January. Technically their resistence should revert to become the support. The most interesting case can be made on GLM. Overall GLM lagged a lot of other drillers in percentage gain. And GLM closed right in the middle of the very important $26 previous resistence. For those (I only remember Paul L) who think TA is a pot of shit the fact that GLM hangs around $26 all day is just a coincidental supply/demand balance. However, the majority of people who trade GLM knows why.
When the drillers break a key breakout like today, there are plenty of money coming to invest in them. The energy funds are flooded with new buying today I am willing to bet. The mo-mo's are also waiting for a day like today to say, ah - the time has come once again. Thank you guys for building such a nice base and taking such misery to do so but here we come to ride with you, again. The TA people look at the chart and say, ah - technical breakout - Buy. The P&F mistress may even show up tonight!
So should we bag the profit tomorrow? The basic question is will we see a higher high and lower low tomorrow and for the rest of the week. This I don't know but I'm sure we will see periods of pullback that could look like the corner begin to turn south. The key is will it make lower low 2 days in a roll. If oil tanks $1 due to new concern, we may go back to fill the trading gap before heading further up. One way to protect the gain is to place a stop below today's low AFTER the market opens and all drillers are heading up. If they open and begin to head lower, then today's low will be the first support and placing a tight stop may get triggered. However, I feel comfortable just to hold onto them and do nothing. The downside is supported very well as long as oil is not collapsing once again. Hate to say it again - the #1 indicator is still crude price, believe it or not. If one has to trade and take profit, make sure to get back in like using a buy stop at a lower price once sold out should the trend turns.
My three picks do very well today. Am I the winner?
1. FGII - up 13.05%
2. UTI - up 17.24%
3. PTEN - up 20.99%
Average - up 17.09% on Day 1.
If no one claims to beat this return in Day 1, I win.
Dwight - show no bias. Stocks can also go to incredible low, much lower that we expected. You must have a really short memory.
DId SI turn into a snail today? I hope they get plenty of complaints from people who pay them $200. |
