Trading for the sake of trading....

On surface, this market didn't do alot on either direction today.    When we look closely, it's actually pretty volatile given  where we are, which is essentially the beginning of the earning season.    Some stocks have given up some gains early on but that is just part of the game.    As traders, we have to respect the nature of this game and participate actively as oppose to just spectating as by stander.    The point we are referring to is that we have to actively take profit when things are going good.    For those that have already gotten into this habit, then it's definitely something to treasure for.    We'll take a look at some stocks....

DRYS, this is definitely one of those stocks that have had a tremendous run in the last few days.    We thought it looked a little extended couple of days ago and today it confirmed our suspicion.    At this time, we are going to be shy away from it unless a dramatic move happens to the upside.

TSL, there was plenty of time in the early going to lock in some profit from its recent runup.   If you got a little greedy, well there goes the last few days worth of gains.    When treating the type of momentum stocks like TSL, it almost always pays to sell into strength and buy back on new highs.    Also, it's crucial to setup tight stops and this can save lots of pain for most traders.     This one touched 9 ema today and we'll see how it responds to it tomorrow and next couple of days.

LPHI, this is definitely one of the better, if not the best plays on our screen today.   Believe it or not, it tacked on almost 6 points since our b/o alert of $36 area.    Now, the worst thing you want to do with this kind of play is to set a price target.    In our opinion, it's just not realistic to set any kind of price target.    We go with the flow.    We'd sell some into the strength and if it comes back and goes higher, we'd chase it higher.    So how do you know when the runup will stop?    We'd get worried if it takes out previous day's opening price with a close.      Although this may not work every time as a reversal signal, you can always buy it back(higher) if you get shaken out.    Remember, we are traders so "get shaken out and selling too early" is just part of business.

ASYS, we like this one's setup even though you can say the other solar stocks are in bit of a funk today.    The low float is a definite plus when it comes to trading this stock.  The fact it's still a semi business after all  is also separating it from the other solar stocks.

PENX, this one also did not disappoint and closed reasonably well despite the market's late day weakness.    Based on its recent action, we think the race to $40 range is on for this one.

VSR, some of you have probably been trading this one last little while and so have we.   We think a pullback is definitely needed if this one wants to see even higher prices.   Momentum is very strong and news flow is very steady with this one.    The intraday action has been opportunistic but unless you can stomach the possibility of a pullback, it's better to wait for a better entry.

Market is heating up on the earnings front and even some of the speculative ones have been driven up on positive results.    We just want to caution readers that when looking at the price reaction relative to the earning report on the speculative ones,  ask yourself if the reaction is reasonable.   If you think the reaction is reasonable, then ask yourself again how long this reaction can last and ultimately ask yourself if you are going to be comfortable trading/holding it till next week.     No traders are alike when dealing with any kind of plays.   We just want to make sure that you are aware of the risk and effort that's involved into making a spec. play profitable. 

Solar Burn...

What is really funny about this market is that while a couple of big names that kept on going down every day, we have some names that are going the total opposite direction, which is up.   The Citi news may have very well kick started this week, but all the focus now is on Cisco's earning tomorrow night.  As oil price keeps going higher, so too are the names from solar sector.   This is really the kind of market where you are either in a lot of pain or a lot of joy.    What makes it tough though, however, is to maintain a balanced portfolio where you try to speculate on which sectors would move next.   As we have witnessed, many of the Asian names have been under pressure the last few days while some of the more expensive names on our watchlist  kept us in the game.       

First, the good ones...

FSLR/SPWR/GOOG/MA/BIDU/AAPL/RIMM,  basically, had we been trading nothing but the expensive tickers ($100+), we literally would've been making a killing in this market.    These aren't the names we are unfamiliar with.   In fact, pretty much all of these names are positions in our portfolio at one time or another.    You can say that these are some of the obvious leaders in the market and those are the ones we ought to be owning if we believe this market is going higher.   The point it, we gotta have some of these names in our portfolio.   We may not afford all of them with big sizes but these are the ones that are carrying this market higher.

Solars, JASO TSL SPWR FSLR ASTI, every time dollar gets dumped, and oil gets bid up, and then these guys zoom another 10% it seems.    Some of these names are releasing earnings next few days so we'd have a pretty good picture how traders would react to their report given the current valuation.

AIXG, a somewhat new name to these parts is this German ADR semiconductor/equipment maker bought up early in the morning after earning. It's 9mth eps.17c vs. (0.03), while revenues jumped nearly 50%.  This co' is thriving on the demand for LED units which is in a strong secular growth mode.  The order intake Q# and the resulting backlog was very good here.  In the last 3 Q it's order intake has gone from 40 to 50 to 70mln euros resulting the co' largest ever order backlog.   This stock trades overseas as well and takes it's open gap cue from its action over there.

GHM/DXPE, these two are couple of the recent earning plays that are being bid up quietly.   We definitely don't want to ignore these as they can creep 10% on a weekly basis.

Now the nervous ones...

STV/LFT/CISG/GA,  all these have one thing in common and they are recent Chinese IPOs.    Aren't we supposed to be up 25% by now by holding these?   Right now, we are as puzzled as many others as to why all of these names aren't getting any momentum to the upside.    It feels like in  20 more trading day, there won't be anything left in these stocks;).     At this point, we simply have to play the statistics and probability game.    Any of these would be considered longer term plays and we just have to play that way accordingly.    The quiet period is going to end soon enough for some of these names and earnings are coming up as well.    We are looking forward to those events as they can be the kind of positive catalyst that can drive these stocks.    The bottom line, these plays are still at the beginning.

Simply, you cannot hold one or a few of these IPO's, 'nervous ones' without balancing out your book by trading/ holding the 'good ones'.  That is missed opportunities day after day.