I came in this morning long a little Asia Entertainment & Resources Ltd. (AERL) and E Commerce China DangDang (DANG) knowing that the monthly employment numbers were due out at 8:30. After the disappointing numbers came out the market barely made a whimper. The question you have to ask yourself is, “how do I plan my day around a non-event?†Well luckily for me I have a basket of stocks to look at each and every day that I can trade in both directions.
Rare earths gapped down hard and we were looking for a trade that broke yesterday’s lows to the downside, then came back up and went through those same low’s on the upside. That is known as the 80-20 trade. And boy did those trades work well for me and hopefully anyone listening to us on T3Live Radio.
I actually made good money on the second tier rare earths, China Shen Zhou Mining & Resources Inc. (SHZ) and Avalon Rare Metals Inc. (AVL). SHZ was a much harder trade than the others. You had to be very patient with it. One of the things I do constantly is trade stocks off of one another. Every rare earth stock was green and trading at highs and SHZ was still down 30 cents at $9.30.
I finally caught the move in SHZ when I bought 5000 shares of it at $9.38 and sold most at around $9.60. I was able to erase the “impatient losses†I had accrued while waiting for the stock to go. In retrospect, I should have gotten only a small amount of SHZ until it showed me something. I didn’t do that. Luckily the trade worked, I erased my losses in it, and ended up with a nice profit to show for my troubles.
Other trades that worked well for me today included one in China MediaExperss Holdings Inc. (CCME). I bought a CCME feeler at $16.70 when I noticed volume coming in. I scaled in a little more as it got above $80 and held to see where it would go. It got a quick spike to $17.15, I was able to sell some for a profit and hold the rest to see what it will do. I will be holding CCME until it breaks $16.70.
I also made money today in AERL. AERL closed on it’s highs yesterday after a last-hour breakout. On the chart, there is a nice rounded bottom from $9 to $11. The true breakout for this stock is $11.55. It got above that point off the open, then stalled. It is currently in a 40 cent trading range. I would like to see it hold above today’s highs for a move to most likely $13-14 with the measured move.
All in all its been a decent trading morning. That’s the beauty of being a trader. The market hasn’t moved all day, yet I have managed to trade stocks that have 50 cent ranges to $5 ranges. Keep your options open and keep an open mind. That is the key to making money on days like this. Let’s see what the rest of the day will bring. Good Luck trading!
*DISCLOSURE: Long CCME
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