Today’s game plan was very simple: watch Sodastream International Limited (SODA) for a move through all-time highs, look for a bounce in China MediaExpress Holdings, Inc. (CCME), and keep an eye on Molycorp, Inc. (MCP) for a move (long or short).
CCME has come from basically $24 all the way down to $16.25 due to fraud allegations from a small time blog. Some big players have come out with compelling reasons why CCME is likely not a fraud, and in my mind it is quite oversold. Unfortunately, my mind doesn’t push around a stock and as of right now CCME is finding a hard time getting buyers to keep this thing afloat. If it can stabilize in the mid $16’s I think we can get a move back to today’s high. If it can’t we will be lucky to see the stock hold its recent support around $15.50-15.80.
SODA was a good trade off the open, but with little volume. I had small size and was able to take an additional $1.40 off the trade that I had started keying on yesterday. I still believe that this stock will be at $50 sooner or later.
Luckily I noticed the pre-market strength in E Commerce China Dangdang Inc (DANG) and Youku.com Inc (YOKU) off of fellow Chinese company Baidu.com, Inc (BIDU) earnings and kept them on my screen after the open. I was able to scoop up a nice chunk of DANG around $29.25-29.40 and it ran all the way to $30.35. That was the trade that pretty much made my day.
I am DEFINITELY not going to overtrade this action today. I currently have 47 tickets, which is so low for me. This is the type of day that a good day can turn into an OK day and then into a “damn, why did I do that” type of day. I am going to sit back and wait for the trade to come to me, rather than me try to chase the trade.
I think SODA can get back to it’s highs, but I will not try to be a hero and push it up myself. I will also not be stubborn with CCME. Just because I believe it is oversold and should get back to $18 doesn’t mean that it will happen. Market makers and traders play funny games with stocks. I mean, it has everything going for it to go up: 1) it’s one of the most shorted stocks on the market and 2) its coming from a high of $23.97. But the longer this stock stays below $18, the longer the shorts can take control and test that $15.50 support level. If it breaks there, this stock could be back at $13 again. I also believe that DANG and YOKU have found temporary bottoms, but again time will tell. They will both be on the long radar for afternoon trades.
The most important piece I want you to take out of this post is simple: it’s great to have ideas and even see great technical setups, but trade the action. The action is where you get paid. If I traded the setup or technicals in CCME, it would have been a very long, hard fight for me. Instead, I chose to move on to something else. Good luck trading the rest of the day!
*DISCLOSURE: Long DANG
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