Have a great weekend

I will be running around and such this weekend and things are a bit easier now that I already know the trade I am going to go for next week. I still am not sure what stock I am going to go with but GTI was down again yesterday on high volume and I think that it may have bottomed out (for at least next week). AXYX did not do too much yesterday and was basically even closing up $.01. I will post again either tomorrow or Monday; I am planning to take my position early next week if not Monday.

Have a great weekend,

Tying News into a trade

What my next short term trade is going to be based on is a combination of upcoming news, company stats, and current trends. I am going to attempt to use an upcoming news release to my advantage. Getting right to the good stuff, the research, what I am looking for this time around are stocks that have just gapped down and are trading well below their 200-day moving averages. As well, these stocks are trading near or at there 52 week lows and also have some type of news coming out next week.

How I found companies with news was through my good friend yahoo finance, http://finance.yahoo.com. After I did my search to find the companies that were trading basically in the dumps I went on a technical search to find certain patterns I was familiar with. What I was looking for were stocks there were either very close to their 50-day moving averages or far below their 50-day moving averages. Naturally, stocks have a tendency to retract or climb towards their 50-days, eventually. If I saw a stock that looked interesting, I would type its ticker into yahoo finance and go hunting. I would look at the following information:

1. Headlines - Was there anything coming next week? Did any news just come out this week?
2. Insider Transactions - Were there alot of higher ranking officers buying this stock or selling this stock recently?
3. Insider Roster - Based on what I found from who was doing what, I would give myself an opinion on how big I thought it was. For instance, if the Director was excercising options worth 200 shares valued at maybe a few grand well then I could care less.
4. Message Board - Yahoo finance offers message boards where people can post whatever information they want. These boards RARELY have anything useful. Read through some of these and you will find that there are some VERY incompetent people on here. I do not advise taking any information from these. What I used them for is to see if I could find the one or two people who actually new something and could relay some dates of upcoming events. This basically just gives me a feel for what speculative news (good or bad) may be coming up. Again, I highly highly recommend staying away from these boards, or if you want to read them TRUST NO ONE at all. REGARDLESS of who they may be, majority of the time they are bashers or someone trying to sell or pump the stock, PERIOD.
5. Key Statistics - What is the short % on the stock? Has this number increased or decreased relative to last month? These numbers just give me a little insight as to what may be a bullish or bearish trend. I am sure you have seen me speak of these indicators before but I will relay again that if 25% of the float is being shorted, it may mean someone knows more than we do. It is something to just take into consideration.
What is the debt on the company? How much cash do they have? If a company has a ton of cash and no debt it gives me a quick signal that the company will at least not be in any trouble for a little while. If a company has alot to offer but a crap load of debt and no cash, it most likely means you may be in for a interesting ride because you do not know if the company is secure short term or not.
What is the Current Ratio and Enterprise Value? The Current Ratio basically relays the debt and cash in one number. This number tells me how capable the company basically is in taking care of short term obligations. Higher the number the better. Enterprise value in a very basic sense can give me an idea if the company is possibly undervalued. What I am looking for is an Enterprise value that is less than the market Cap of the stock. This number is compromised by adding debt to the market cap and subtracting cash and cash equivalents. So in theory, if someone were to buy the company at its current price, this is (inna sense) is what they would be paying for it.

Now that I have explained what I was looking for in regards to finding a short term speculative stock, can you see how these factors tie in? You have inna sense a company that for the most part isn't getting bet against (shorting), a company that has some sort of news coming out soon (Headlines), a company that is stable for the most part (Current ratio, cash, debt,), a company that is possibly undervalued (Enterprise value, stock trading below the 200-day), a company that may have a short term play ahead (price relative to the 50-day MA), and a company that possibly has some insider knowledge (possible insider buying or selling). So, after about an hour of looking around at possible picks I came accross two main prospects: AXYX and GTI. ALL of the numbers I am going to use are from Yahoo finance, just a reminder, and are based off Thursday's closing price). I will go over my analysis of each company and what the company may do for me next week (quick overview):

AXYX - Axonyx Inc - CFO presenting at conference next Wednesday, (-) Enterprise Value (if a company has a negative enterprise value it means that technically the company is free for the most part because after buying all of the stock, the cash you would get back for it would cover what you paid for it), price nearing 50-day, no real intra-day bearish trends (stock price has been inna basic consistant range for a while), short % = 5% as well numbers have not grown much since prior month, high current ratio (lots of cash, barely any debt = can pay short term obligations), and no major insider transactions since January (something to think about though, look at this and you'll notice that insiders were selling heavily about a month before the massive collapse, hmmm... a clue maybe? Did someone know something we didn't? Something to think about.).

GTI - Graftech International ltd - Earnings get posted next Thursday, Huge Enterprise Value ($1.03 Billion vs Mkt. Cap of 381.50 Million, do you think these guys have more cash or debt?), Price trending too far away from 50-day which means possible natural retraction, consistant bearish trend with multiple dsitribution days, Short % = 7.19% but has dropped substantially since last month (6.80 M vs. 8.94 M), low current ratio (but every industry has different avergaes), and lots of share acquisitions (non open market) by all main officers, etc. (but this has been happening for literally years, and since they are not open market purchases, this probably means nothing to us at all; basically they are being given shares by the company).

So, now that I have gone over the two prospects, which do you think is a better choice? I am not going to post my pick between the two until I buy one or the other. I will most likely buy my shares either tomorrow or early next week. What we are going for here is (with AXYX) to see a natural little run from the CFO speaking, or (with GTI) to see some sort of price rise regardless of the earnings (since they will most likely be bad; companies do this often, it is actually really weird but you will see price rises before earnings are posted even when they are expected to be bad). We also tie in with GTI that with its price being far away from its 50-day that it may retract naturally.

Well, that is all for tonight, I apoligize if it is overwhleming but just take in the core concepts behind what I am looking at. Try to tie in all the little pieces of the puzzle together. You can post your pick or any pick for that matter in the comments section of this post if you want. I am not sure what I am going to do yet; hopefully I make my decision pretty soon here. If you have any questions on this I will be available all weekend so email me or post up. Have a great night,

To the future,

Thursday, the re-coop day

Today I have decided to let things to just be and not do any trading. I have a meeting this afternoon and not all of my account is able to be traded at this time because of Ameritrade's processing. Later on tonight I am going to search a good number of companies and get something in line for hopefully tomorrow. I will go over my whole research process I used and explain more about what I am looking for next time around. I am also going to post more information on my affiliate program I am going to be starting up here soon as well. O, I also created the blog for the R3I, LLC sponsored summer stock contest. Check it out here, http://richdad2.blogspot.com/.

To the future,

PS - Thanks to everyone who has posted up comments so far or has emailed me in regards to the blog. I love reading the comments, love keeping in touch with you guys, and love the input.

My Account value after CNR

As you can see the CNR trade put about a 2.5% dent in my portfolio. Every trade is a new lesson, a new triumph, or a new lesson and triumph. Today was a $290.10 reminder that insurance is always nice to have, to always minimize the potential downside, to never assume anything, and to never let emotions in the game. As a whole we are now better prepared for the next run-around and I am excited to see what is next around the corner. I have always been told that is isn't about getting to the top that is the best, but more so the ride. You can never be let down by a bad trade in the stock market because it's a given fact; you will loose. It's time for another win in the summer series.


My Account after CNR

CNR, the costly mistakes and lessons learned

After picking up my 3,600 shares I was feeling pretty confident in my decision. Over 500,000 shares of support was at $.84 and I got in at $.85 and $.86. The first big mistake I made was deciding to go eat breakfast, bad choice. I came back about a half hour later to find out about 800,000 shares had traded in another short term downswing and not only had the support fallen, but the price had fallen as well. When daytrading you will learn some important tricks that will help you become successful; your time is one of them. Regardless of how confident you are in a stock you should always have yourself covered. I did not put a stop loss on my shares and to be honest it didn't even cross my mind until right now while writing this post; Bad decision. The stock was then at about $.81, $.82 and I had to react. My reaction? I decided to let it play out since its intra-day low was $.81 and I figured that $.81 would be it's final bottom.

I left again to come back to my computer freezing and my internet running slow, not cool at all. After finally re-installing my graphics card drivers and getting up and running I found out that $.81 was not gonna be the bottom point on the day. Another very important lesson that I had forgotten, NEVER ASSUME ANYTHING. In the market, ANYTHING CAN HAPPEN (EOM). Once you loose grip on a stock you are daytrading that you do not have insurance on it is very easy to get emotions involved. Remember to always stay disciplined; this is where I finally decided to let go. I decided it would be best to just take the hit and walk away with a few lessons to relay. I no longer had any foregoing perception on the company and my battle plan had been put to shame. I sold out my 3,600 shares at $.78 for about a $280 loss (w/o including transaction fees).

There are a few different ways you can look at something like this. You can either think that I did not have ENOUGH patience with it and should have held on longer thinking it could have gone up or that I actually made the right move to get out. In the end, my main downfall was my insurance; I was not covered. Looking back now at this trade I should have put a stop loss in at $.83. This would mean that if the stock traded at that price at any time I would automatically get sold out, minimizing my loss. Why $.83? Well, when I got in my "call" was that the stock had bottomed out and would go up on an upswing. The support was the 500,000+ shares at the Bid of $.84. By me putting a stop loss at $.83 I am basically saying in my mind, "Hey, if this stock can't support itself at $.84, I can't bank on any support further down the rabbit hole".

With that being said I hope anyone reading this takes some good lessons out of it and always has insurance on their trades. Personally, this goes horribly against what I have always done, but when day trading and in these market conditions especially, you HAVE to minize your losses. Right now I am 1 and 1. I got one win and one loss on my 10k portfolio record, and since I didn't minimize my loss, I am now in the hole. A few lessons re-visited but I am back on my feet. It is time to go back to work and find the next play.

To the future,

CNR, the Playhouse

Yesterday afternoon I scanned through about 400 different stock charts off of my Dailygraphs program looking for "bounce situations". I did not care about anything in regards to the company itself at this point and I was just looking for possible places to make a few pennies on my last $3,150 I could trade (for some reason Ameritrade won't let you trade cash from a last trade until it is full processed or something). I ended up with about 30 stocks which I narrowed down to 10 then finally narrowed down to 2: ALTI and CNR. ALTI was in a big down trend and I was not interested to play it today but more so in the next few days (if Ameritrade will even let me). CNR was also in a long term downtrend but more interestingly sitting right on its 200-day moving average. Support point? I was not sure so I decided to track it and try and get a steal on some shares this morning.

I stated that to let you know what interestingly enough happened this morning which is not only a rare situation to actually see with your own eyes but also quite fun for 9:30 AM. I am going to try my best to explain this but take note that I can 1. see every trade processed, what price it was processed at, and time. 2. I can see how many shares are for the most part available at each price (at the Bid and Ask). 3. I can see who traded what (the institution or house, the Exchange, and if it was by some random joe like me then it would state "Nasdaq" or "Nasdaq NM" next to it.

So where does this leave me? In a good spot perched off a distant clliff ready to swoop in for an easy kill, and that is what I did (hopefully). The stock closed at $1.00 even yesterday and in the morning hours of trade (this is the pre-market from 8:00 - 9:30) there was ALOT of volume. CNR averages about 2.4 million shares a day and before the stock even opened at 9:30 the price was at in the low $.90s ( which is why you would see a gap down today or on any stock for that matter on a chart) on well over 1 million shares. But who was selling all of these shares? Everyone? No, just 1 Exchange represented almost all if not all of the volume. Then, the stock opens, kinda sits for a few minutes, then major downtrend starts. We are talking 10s of thousands of shares just being sold heavily on one Exchange, AMEX.

To make a long story short, AMEX drives the stock price down to $.86, $.85. The bid eventually hits $.84 and what do I see? over 500,000 ready to be bought at $.84 by guess who, AMEX. What does this tell me? This tells me that AMEX is now done selling and wants to get back in at a steal price. So, I swoop in and snag as many shares as my $3,100 left in my account will let me buy and end up getting 2,000 at $.85 and 1,600 at $.86 (both bought at 10:11:09 AM). Now, hopefully AMEX is done and doesn't pull a fast one on us and we see $.84 as the bottom for this trend. Every penny the stock goes either way is $36 (for the most part) out or into my pocket. Only time will tell, but either way it's just another morning in a daytraders world. Now, to get some breakfast...

My Account value after ARBA

As you can see I made about $50 off of ARBA. Though this could have been more successful in trading you can never get frustrated with mistakes, you have to keep going. The lessons you learn daily in this game are endless, and the time you spend thinking about "How it could have been different" is the time you waste figuring out the next big trade. I Hope everyone learned from this; see the post below for how I made my mistake/success today.



My Portfolio Value after the ARBA mistake/success

ARBA, A lesson re-learned

Now, for those of you who keep in check with this blog you will know that I had boughten 1,000 shares of ARBA at a steal price of $6.839. My order got processed yesterday afternoon at around 3:10 PM. Today, the company came out with 2 seperate news releases that posted positive for the company. Though the affects were delayed the stock ended up pushing to new highs within the day. The stock now sits with an ask of $6.98 and a bid of $6.97. The lesson I am going to make my day based on is order types. I placed an Limit order today at $6.88 to cover myself in case the stock went downwards. But the mistake I made was just that, the stock didn't go downwards but upwards and my order got triggered.

Not realizing it till about 10 minutes ago I figured out that I had in fact placed the wrong type of order. I am in fact somehwat dissapointed now but also content. My 1,000 shares were picked up by an Institution and I got $6.911 for them. Minus the costs to conduct the trades I profited about $50 off of my work. The cruddy part is is that my mistake of placing the wrong order type costed me $60 more accordinging to the current bid price. Now, I am sure it is probably confusing as to why my order got processed and why I am dissapointed but I will quote Ameritrade's help center to explain some of the basic order types:

"Types of Orders

After you have decided whether you plan to buy or sell a stock, the typical order ticket will give you a few more choices. You can choose between a market order, a limit order, a stop order, a stop limit order, and a trailing stop order. Each of these choices has its own implications as seen below.

A market order is an instruction to buy or sell a stock at the best market price available at the moment. For example, you may want to buy 100 shares of XYZ stock. If the current market for XYZ is 50 bid and 50 1/8 ask, you may or may not get the stock at 50 1/8. Market orders will definitely be filled, but you cannot be sure of the price. Prices will vary with current conditions, and these conditions are not always reflected on your computer screen. The actual price at which your order is filled may be better or worse than you expected.

A limit order lets you place a price restriction on your transaction. You indicate that you are only willing to buy or sell a stock at a certain price or better. Your order is not filled unless the stock trades at that level. Placing a limit order, however, is not a guarantee that your trade will be executed at your limit price. It does, however, eliminate the risk that your order will be filled at a price worse than you expected.

For example, if you want to buy XYZ stock at $50 a share once again, and the market price is 50 bid and 50 1/8 offer, your order cannot be filled immediately. If somebody comes to sell the stock at $50, then your order will be filled if it is next in line for execution. If more buyers enter the pit and drive up the stock price, your order will not be filled.

A stop order is an order to buy or sell a stock at the market price once the price reaches or passes through a specified point, called the "stop price." This type of order is generally used by people who own a stock and want to make sure they sell out if the stock price starts to drop. The stop price placed on a sell stop order must be below the current bid price of the security.
Stop orders in volatile issues will not guarantee an execution at or near the stop price. Once triggered, they are competing with other incoming market orders.

Stop orders can be placed for buy orders as well. The stop price specified for a buy order must be above the current asking price.

A stop limit order performs like a stop order with one major exception. Once the order is activated (by the stock trading at or "through" the stop price), it does not become a market order. Instead, it becomes a limit order with a limit price equal to the former stop price.
For example, you place a stop limit order to sell stock with a stop price of $45 a share. As with the stop order, once the stock trades at $45, your order is triggered. However, the broker cannot sell it below $45 a share no matter what happens. The advantage of this order is that you set a minimum price at which your order can be filled. The disadvantage is that your order may not be filled in certain fast market conditions. In this case, if the stock keeps moving down, you will keep losing money.

A trailing stop order is similar to a stop order, but instead of a stop price, a stop parameter is used, creating a moving or trailing activation price. The stop parameter can be entered in points or by percentage.

For example, you own 200 shares with a cost basis of $10. The stock is now trading at $15. You want to protect yourself against a drop in the stock. Instead of a stop order at $13, you place a trailing stop with a stop parameter of 2 points. The activation price is calculated by taking the current price and subtracting the stop parameter. For this example, the initial activation price is $13. If the stock never goes higher than $15, the order will activate when the stock hits $13. If the stock goes to $16, the activation price becomes $14. Please note: For sell trailing stops the activation price only moves upward, and for buy trailing stops the activation price only moves downward.

Source:
Ameritrade Education Center
http://www.ameritrade.com/educationv2/ameritrade_framed.html"

Can you see my mistake and can you see the order that I should have placed? I hope that you now have a better understanding for the options you have once you own a stock and how you have to be very careful with what order you actually place. ARBA is now over unless I can get a competitive price again which may or may not happen. The mistakes you make in the real game are the ones that stick with you the longest; learn from my mistakes ;) !! I wish everyone a good morning (to those of you who may still be getting up) and look for my new possible picks later on today.

To the future,

ARBA opens with news, but how big?

I woke up this morning, fired up my comp, and checked out ARBA to see that news had been released this morning, http://biz.yahoo.com/bw/050426/265453.html?.v=1. Apparently, Ariba "today announced the availability of Ariba Supplier Connectivity at the Ariba LIVE 2005 Orlando conference. The subscription-based offering extends the benefits of the 120,000 suppliers enabled on the Ariba® Suppler Network(TM) to a large community of enterprise buyers and their suppliers currently using non-Ariba spend management systems." I mean that is pretty good news in my eyes and the stock opened at $6.91 which is a $.02 cent spread over yesetrday's close.

So now what though, is the stock flying up? Well no, and that is what interests me so far today, for some reason (which I would probably find out from digging further) I have reason to believe this was already known. I believe this conference already occured and news had already been release on other key topics. We have to remember that the original reason this stock had a bad day on Friday was because of the earnings release Thursday after the close.

So what are we going to do, well I am going to keep watching it closely. It actually downtrended (we are talking a 6 minute trend) down to $6.86 but now is hovering around the low $6.90s. We could see the price push past $7 with the current circumstances which would be great. What I am going to watch for very closely today is if I see more buying or more selling. Well, yeah Blain, duh. But this doesn't mean just in general, it more so means within trends. If there are bigger buyers buying bigger lots of shares vs smaller buyers taking profits then that is bullish. As well, where are the intra-day resistance points? Well I can tell you that from the time I started this paragraph not even 3 minutes ago ARBA took a run up to $6.95 and has met resistance here ( about 12,000 shares worth). So if it can break past this resistance point then you will most likely see a run past $7. All of these tiny points come into play because with our position, every penny is $10 more dollars in our pocket or out of our pocket.

To the future,

ARBA, the good, the bad, and the ugly

Alright, it is now "later" and I have re-looked at my picks, well one of them at least. As you probably already know from reading early I went out onna limb and picked up 1,000 shares of ARBA today around 3:10 PM. The buy was a clutch purchase for the intra-day patterns it was showing throughout the day and I got a steal on the price. The good news is that the stock closed at $6.89, about $.05 higher than where I bought it, showing about $50 in gains to my portfolio. The stock had met all my pre-limb quick observations based onna technical and original search looks. But, I had overlooked some fine details that I shouldn't have and I will relay the bad and the ugly that this stock may reflect in the upcoming day or few days.

1. Upon looking again at the company statistics I noticed the company has had a reverse split in the last year, not a good sign. Though this isn't too big for my short term play it still reflects a company that is in some long term trouble. To add to it the company is trading below the price after the reverse split and has tested its 52 week low; a bearish sign.
2. The company has a short % of 10.26% (this is as of March 8, 05). This isn't necessarily bad because the stock has run up recently (most likely a pump and dump) but the stock did show an increase to the short # of over a million. What will make this factor bad or not is the April figures which will actually be availble through Nasdaq on Wednesday. If the number has increased again up from March 8th to April 8th that could mean bad news; another bearish sign.
3. I went digging after I had bought the stock to find out why it had run up and ran down so fast(the extra volatility in the past week). Apparently, the company ran up pre-earnings then posted bad earnings. The company also got downgraded by CIBC Wrld Mkts and RBC Capital Mkts on Friday. This basically puts the PPS (Price Per Share) most likely back to or lower than the price it was at before the (in my opinion artificial) run up.
4. I overlooked the fact that the company (from a technical reading) has been opening on gap ups and downs. There has been four days inna row with the stock opening up on a gap one way or the other. Yes, this can be good, but with a company that is already not in so sound financial shape this could be bad news and doesn't allow me to limit my losses if a quick gap down occurs at 9:30 AM tomorrow.

Now, taking all of this in some lessons and can be drawn and changes have to be made accordingly. The stock did show accumulation throughout the day today reacting from the big downward move from Friday. This is bullish and what we are looking for is to ride the quick bounce the stock will take, hopefully. The stock closed strong and some big block shares were purchased in the closing seconds which is good (big relative to the intra-day patterns, these blocks were about 14,000 shares each; two total). What I am going to look for tomorrow is a natural reaction to the downtrend and a nice "strong" day. With the intra-day patterns shown and the closing volume I have reason to believe we could see a price over $7 tomorrow. My 1st target price is $7, my second target price is $7.20, and my third target price is $7.50. If the stock sits tomorrow I will most likely walk away without any worries on my shoulder and go back to the drawing board. I am in a good position holding a small amount of shares and it should be easy to sneak my order in if need be. One final technical fact was that the volume was lower than the avg (50-day average) which you usually do not see the day after a heavy drop. So tomorrow morning I hope to see some early birds give the price a nice jump and a nice open, otherwise it will be close watching for Ariba Inc. Have a great night.

To the future,

ARBA trade on intra-day chart

This is the trade once I placed it today. What I saw was an intra-day downtrend in the stock that had been re-occuring throughout the day. The low on the day was $6.81 and the high was $7.09. I knew that catching the stock during one of these downtrends would get me in at the most competitive price for my 1,000 shares. We will see what happens tomorrow but look for a post later on tonight on my thinking and the strategy for this position taken today.


The Trade seen on my intra-day real time screen

My ARBA 1,000 Share Purchase 

The Beginning 10k Portfolio account Balance

This is a picture I took today of my Account so everyone could see my current status. As you can see I have $10,000 in the account and it is ready for trading! Also, you can see that I do not have marginable funds as seen by the "non-marginable funds" listed. If I had margin approval this number would be different.



My Account Balance reflecting "The 10k Portfolio"

The Research Process this Week

Before I get into what stocks I am looking at this week it is important to understand what I am going for with the current market conditions. The market is basically horribly unstable and it is very hard right now to predict where the heck it really is going. As a result, I am not going to be in any stock for too long. The strategy I am going for is finding stocks that are in normal patterns (technical research) and that I can make quick moves with (a day - a few days most likely).

To find what I am looking for, I first ran a custom screen this morning based on the following criteria:

- Industry Group Relative Strength Rating = A
- Accumulation/Distribution Rating = A or B
- Current Price = $0 to $35 a share
- Current 50-day Average Volume = 100,000+
- Debt% (Latest Fiscal Year Reported) = 0

With the market in its current state I only found 17 companies that met these criteria: AGNT, ANR, ARBA, ASR, BEBE, CBK, CHCI, CHIC, FINL, FORD (not the motor company), HITK, HNR, KOOL, LACOE, NAK, PRGO, and WTSLA. My reasoning behind searching for these types of companies is as of follows:

1. I am looking for companies that are in a strong performing industry group because doing short term trades these stocks are more likely to go up because as a whole group they are performing great even in this crappy market.
2. Accumulation Distribution is important in being an A or B. This means that the company has been getting accumulated by Institutions over the last 13 weeks. For the short term, we have a btter shot of getting a quic run if the stock is already under accumulation vs. being under distribution.
3. With a current price of $0 to $35 a share it makes it more attractive for me. I personally like having more of a single stock in my portfolio (share wise) and with only $10,000 we aren't going to be buying alot anyways. I included penny stocks just because they are typically alot more volatile and in my opinion fun. You will see me trading them most of the time in this portfolio because of this reason. I want to grow this money as fat as I can, and with higher risk you get higher rewards.
4. Having an average 50-day Volume of 100,000 shares + a day means that the stock is getting traded for the most part. If a stock is only trading 100 shares a day what good does that do me? Usually I will use a number around 400,000+ but with this market it is harder to find good picks.
5. Having no debt in my eyes is important for any company. I personally use this just for my own sake and I have noticed that companies with no debt tend to perform better than those with debt. Don't get me wrong here, there are some VERY successful companies with tons of debt, Berkshire Hathaway anyone? But, for me this is something that I just prefer, and with the current market though, I may be changing this up later on if I can't find anything.

So now that I got my 17 prospect companies, I go in and pull up a chart on each one looking at the overall current trends. This is the major technical analysis part of my research and I apoligize but I cannot display any charts here. I use a program that I pay for, www.dailygraphs.com and if you want to see these charts you can use www.bigcharts.com if you'd like. What I am looking for here are companies that:

1. Are not breaking out/posting new highs - WHAT? Why not? Well, learning in the crash of 2002 I realized that in an unstable market (no the currnet market is not like the 2002 crash) any company that is generally posting new highs or "breaking out" as it is called of bases is not in my opinion gauranteed gains. Usually when the market is in a bearish trend these stocks will quickly fall back into their bases or collapse.
2. Shows a bullish trend - With my program I can go into the intra-day charts and see in 5 minute increments how the stock has traded. This is a part of my analysis that I have developed on my own and as a result I can't tell you exactly how I judge a stock based on this. But, what you are looking for is a sign of short term strength (since we are only gonna be in for a few days).
3. Shows higher volatility - I am looking for stocks that can make 5% plus moves in a matter of a few days. Again my philosiphy of more risk, more reward applies heavily here and I do not go into a stock to get 1 or 2% out of it. I go into a position looking for 5% plus in the shortest period of time. Though this applies to my downside, watching my stock very closely is critical. My research is one important aspect of my work but my abilities to judge a company on the fly during the day is also very important. If I see a downward trend evolving or any other intra-day bullish signs I will adjust accordingly.
3. Has a pattern that I am familiar with - I am looking for companies in patterns that I have seen before (I have looked at 10s of thousands of charts in my short 3 years so far). If I see something I like, I'll write it down for further examination later on. Generally I can make a short term call on where the stock may be going.
4. Where the stock is relative to its 50 and 200 day Moving Averages - This is important because these two lines can be support points or also resistance points depending on where the stock currently is. I will make a judgement call based on the stock if I like where it is according to its 50 and 200 day MA.
5. Other - I look at the graph over time and look at weekly and possibly monthly patterns. I basically just see how the stock has performed to certain circumstances in the past and give it a judgement call rating. There are alot of little details that I compromise in my head as I go over a chart and I apoligize that I cannot relay them to you; it is just my thing.

So, after looking at all the charts I have written down the ones that I like and that I want to look at even further: ARBA, CHIC, HNR, KOOL, NAK, WTSLA. These companies have passed my technical judgement and now I use yahoo finance to look at the comapny statistics, http://finance.yahoo.com. Some of the things I now will look at are:

1. Insider Transactions - Has the company been getting bought by insiders? If so, who has been buying it. Just because I Director has been buying a few times doesn't mean much. But, if the CEO, CFO, Director, and other key management has been accumulating shares recently, well than that could be a bullish sign. But what you do not know is if these insiders are buying the for short or long hold. This is a judgement call I make because even if the company is under insider attention doesn't mean that it will gaurantee me my 2 - 3 day run I am looking for.
2. Splits, Dividends - This is important only because it can relay inna nutshull a company's strength (in a very basic sense). If the company has split 3 for 2 a year ago then that tells me that the company is growing (again, this isn't considered these stats are not considered very gihly but it is something that I will look at). If the company has reverse split in the last 3 years than that is not good in my eyes at all. A reverse split is usually a long term teller that the company is going down the tubes. Also if a company is paying dividends it means the company has access cash sitting around which and could be a sign of strength.
3. Shares Short/Short % - This is HUGE in my eyes. The short term status of a company can usually be told by its short % or the percentage of its overall float that is being shorted. I have done alot of personal research on this and I am actually weighing this highly in my short term module I am developing. If a company has a short % of lets say 20%, well then you can probably bet that someone knows something you don't. I will make a judgement call accordingly on this stat because if the company's short % has decreased the last month well that tells me that the shorters have started to cover and that could be a short term bullish sign.
4. Other - I will glance over all the other stats on this page like cash, price/book value, enterprise value, etc. For the most part these are not important for the type of trade I am going to do but they still will weigh in my mind when judging a stock.

So, now we have looked at these companies key stats and I have narrowed down my field again: ARBA, CHIC, and NAK. Now that I have my 3 companies I take a break from my research and I will look them over again later on. It is important that I refresh my mind because I will rejudge them since I forget alot of my main points I have supported already in my mind. Usually I will pick up on something I missed. Later on tonight is also when I go digging. Digging is basically reading all the public news you can on a company to give yourself any sort of edge. I will try to find out if there is any news that could be released soon, if anything big has happened, etc. This is very important because with volatile stocks any little release can potentially affect the price greatly. As well, I will go in and figure out how much I want to buy, where I want to buy in, my overall strategy behind it for the next few days, when I will sell out, etc. The true game begins once I hit the buy button and take a real position.

With that being said these three companies are my main prospects as of today, Monday April 25th, 2005. I will go over these again tonight multiple times and most likely revise my search (based on the debt%) and look for more prospects. Check for a post sometime tonight on my final decision and if I find one or two I am confident in then I will react accordingly tomorrow.

To the future,

Welcome

Welcome to my blog. I am preparing my portfolio this week and my Account will be up and running next Monday April 25th, 2005. Until then I am free to answer any questions regarding my blog, my work, or stocks in general. If you have any questions please feel free to email me: Jawz142@yahoo.com (also in my profile). Have a great week and always

To the future,