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 February 11, 2004
Commentary-
Today I'll review some of the trades that we
have been looking at, and I'll make some comments about the unfolding action.
I'll start with the one that I find the most interesting, and that's FISV. The
last time we looked at FISV, I was commenting on how it was do or die time, and
that FISV had to take out that regression channel top line if my plan was to
have a shot at unfolding. Let's see what has happened since our last
look.
FISV has made a strong move above the channel and is fast
approaching the grouping. The only thing I am curious about is that it didn't
do this on strong volume. That makes me wonder if this is it or not. For those
traders that wanted to play this 'breakout', if it happened, FISV gave a great
pullback (notable on the 15-minute chart) after the first thrust out.
Now I wait
and see what happens from here. I know this is a lot of waiting around just to
see if something sets up, but I'm mostly watching this one for the educational
value, both for myself and for the readers. This is a very interesting play to
watch.
Let's now follow up on VTSS. I'll show the 60-minute chart.
VTSS is acting just beautifully. It came right off that ABCD I
highlighted the last time we looked this one over. For the longer-term trader,
this ABCD may have been an add-on spot. I decided to scale out of another
portion on the thrust up and stall. At this point I will actually give future
thrusts a bit more room before I scale out of any more. At least that's the
plan right now. I'm watching the behavior very closely as the high from the
last run up is approached.
Let's look now at another trade that is just cooperating
remarkably, and that's FDX. I'll show the 60-minute chart.
FDX is very
similar to the VTSS play. I opted to take off another portion on the ramp and
stall, and I am sitting on the rest, pretty much in the same mode as with VTSS.
I plan to loosen up a bit on the trailing stops for the remainder,
unless the character of the action changes. I'm also watching very intently as
the highs from the last play are approached. It's acting like it is going to
take them out.
Regardless of how these play out, the trades are in very favorable
'no lose' (barring catastrophic moves) situations. Now I let them play out, and
work my management skills. This is an area where I feel that my skills really
shine. Almost every trader that I talk to tells me that his or her management
skills and entry skills are just fine; they only need to improve their
'picks'.
To me, that's a big tip-off that they, in fact, don't have a
complete 'Trading Plan', and are trying to compensate for the lack of these
other skills by trying to pick very high probability trades, but also trades
that will pay off big (good luck with that one). If this sounds like you at
all, and please be honest with yourself, read my free article 'The Myth of Predicting the
Market'. If all your focus is on the pick itself this is a red flag,
even if you aren't able to accept that at this point in time.
As I
mentioned, I will be working some additional stocks into the mix starting soon.
I just don't want to try to cover too many issues at a time, because I won't be
able to do follow up in a timely manner. I try to provide follow up on days
when I add or subtract from positions, or when something of note happens in an
issue (or shortly thereafter), so that the readers can follow along when it
happens.
If I have too many plays going on in the commentary at the same
time, the follow up is going to be 'well after the fact' in many cases. Since I
think that is sub-optimal from an educational standpoint, I'm not going to just
throw out play after play. Like I said, my goal is not to provide the reader
with 'picks', it's to show how I play things, with my thoughts mixed in, to
attempt to help the reader better understand the techniques that I've outlined
in my books and articles.
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