I came in this morning long China Shen Zhou Mining & Resources Inc. (SHZ), Rare Element Resources Ltd. (REE) and Trina Solar Limited (TSL). With the market gapping down seven handles, I wasn’t expecting much. I traded a little bit off earnings in United States Steel Corporation (X) and made some decent money in it.
I really didn’t get too aggressive until the open. Rediff.com India Limited (REDF), one of my favorite stocks in the market right now, just reported earnings, missing by a penny. It didn’t do much pre-market, so I had an idea in my head that short was the way to go. About 5 minutes in, after watching it go from $7 to about $7.50, I decided to “step in front of the train” and be the first one to the short party.
Boy, was that ever dumb. I shorted 8000 shares at $7.35 and pretty much covered the whole thing around $7.55-7.60. I then switched sides and wound up going long. At this point I figured the stock was actually strong and it should see $8 with any strength. This time I was right. I held stock from $7.55ish all the way to $7.90, making back most of what I lost on the short.
My problem was that I should never have been short any size in the first place. I was trying to catch the top and we KNOW as traders that we can never do that. If I just waited a little longer, I would have recognized the true trend and been long from a better price. Another major lesson learned. If I do something like that again, I will make sure I’m in no more than tier 1.
I caught another small move in SHZ this morning right off the bell from $6.40 to $6.55. That’s all I was given. SHZ has been weak pretty much all morning so I took what I could out of it and ran. REE gave a small move off the bell and now is doing what REE has been doing best lately, NOTHING. So, as much as I love ’em, I am hands off the rare earths for the time being.
One trade I will be eyeing today and probably the forseeable future is in Sodastream International Limited (SODA). SODA has a nice wedge (bull flag) type pattern building on the daily. Any move above $40 with a hold on the 15-minute chart should propel this stock to all time highs at $43.88. Again it must stay above $40 and hold or it can pull back to $38.50ish, like it did today.
We have a Fed meeting today and tomorrow and the President’s State of the Union address tonight, so I’m not expecting much movement this afternoon. I am currently down slightly, so you can bet I will be very picky with my trades to try to get green. Good luck trading the rest of the day and I will check in tomorrow.
*DISCLOSURE: No positions
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