I came in this morning and saw the obvious news from over the weekend: Steve Jobs was taking another medical-related leave of absence from Apple Inc. (AAPL), crushing the Nasdaq futures and casting a negative cloud on the overall market.
My game plan this morning called for trades in the rare earth stocks, along with Rediff.com India Limited (REDF), Sify Technologies Limited (SIFY) and Origin Agritech Ltd. (SEED). My plan wound up working almost to perfection. REDF has been trading well the past week, and when it held $9 on the 5-minute chart after 9:45, I knew the trade was on. I picked up some stock in the $9.10-9.15 range and was able to take some quick money out of it. I am still holding a small postion to get an idea what the stock is doing throughout the day.
With REDF rocking and rolling, SIFY was definitely a nice pickup around the $3 area for a move to 52-week highs of $3.22. Currently SIFY is printing $3.40. The other stock on my game plan was SEED on earnings. They beat the street estimates but lowered guidance for 2011. The stock was gapped up 50 cents pre market and I was able to get a nice short off at $11.71. Since the open the stock has done nothing but sell off. The only problem with the sell off is that there is very little volume. But again, the pattern suggested short, so I stuck with it.
I was also able to pick up a nice 80-20 trade on Molycorp, Inc. (MCP). MCP got hit off the bell, broke Friday’s low’s of $44.93 and then quickly bounced back through $44.93 and all the way to $46.76. That is a classic 80-20 trade. I was able to capitalize on that move with some small size. Overall the morning was full of quick trades and taking profits.
The lesson I learned today is that you must stick to your gameplan, even if there is other stuff going on around you. I could have come in with short on the brain with the AAPL news and the futures gapped down. Instead, I stuck with my plan and succeeded on pretty much each of my calls.
Most of my money has been made to the long side today. Stocks like REDF, SIFY and SEED don’t react to market gyrations as much as the market stocks do. Just because the market appears weak, doesn’t mean that the stocks you are looking at will be weak as well. Good luck trading the rest of the day!
*DISCLOSURE: Long MCP and REDF
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