New Long – INFN

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After being stopped out of TNK for a small gain, I’m on watch for some new longs. One that I’ve been watching since its most recent break out is INFN. The stock has been in a basing pattern since shortly after its IPO and has recently broken out. Since the break it has been moving in a tight range creating a text-book Darvas box made famous by Nicholas Darvas and his book “How I Made $2M in the Stock Market”

I’m anticipating the break, which is something Darvas would not have done, however because I’m may not be around the computer when it actually breaks, I feel comfortable doing so with limited risk. When it breaks out of this range I would look to add shares.

With a stop below today’s low of $13.40, I have gone ahead and added 2,000 shares to start. See both the weekly and daily charts below.

 

INFN_12.9.14

12.9.14_INFN(daily)

 

Long INFN $14.43, Stop $13.40

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Anatomy of a Trade – TNK partial sale

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With an adjusted basis of $4.49 and a stop of $4.20 my risk or X is $.29. This makes my 1x or first profit target $4.78. If you have no idea what I’m talking about you really should pick up a copy of TTT, it’s a pretty good read. Yes, I’m biased but whatever.

As I’m just now getting a chance to log in for the day, it’s a pleasant surprise to see TNK hitting the 1x mark and I have taken the liberty to book slightly below 1/3 of my shares here and raise my stop to break even.

4,000 – TNK – $4.80

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Anatomy of a Trade – TNK

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TNK_12.3.14

OK, let’s recap.

November 20 – TNK a decent setup, anticipatory add as I wanted to make sure it was going to close strong. It didn’t, partial shares kept on the books. 5,400 Shares purchased at $4.38 stop $4.00. Post HERE

 

November 28 – (Mid-Day) – After consolidation TNK going for confirmation break. It was early in the day (mistake) but I viewed the move as solid and took the opportunity to add additional shares to the existing position thus making the trade a complete 50bp risk. I added 3,600 shares giving me a basis of $4.45 on 9,000 shares and kept my stop at $4.00. By day end the stock had faded once again, I was annoyed I added shares too early but stuck with the trade.

Shortly after that last add the stock was man-handled turning into a loser. I followed my plan and would have thrown the position in had it traded to $4.00. I didn’t. Post HERE

 

December 3 – The stock is again trying to break out. This time it is doing so after a decent little sell off, giving me the opportunity to raise my stop to this new low. The theory is that if the stock is a winner, it should NOT trade below the December 1st low of $4.23.

I may regret the move, but with the adjusted stop of $4.20 (a smidge below the rinse low) I’ve gone ahead and added another $1,000 shares. My basis is now $4.46 on 10k shares with a stop around $4.20. If the stock closes well, I will add to my shares one final time with the objective of have a total 50bp risk (approx. 4k) on the adjusted cost basis, assuming a $4.20 stop. Let’s see how she trades into the afternoon.

 

Long TNK

 

 

Update – 4:00pm

With the stock closing strong I added a final piece bringing my total share count to 13,000 with a basis of $4.49

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Update on Longs

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Since the market decided to dish out a little ‘who’s your daddy’ on me a few weeks ago, I’ve had to settle in and return to the basics. My objective has been very simple. I will slowly add high quality charts, documenting each trade, making sure all are updated accordingly in my risk analyzer and follow the trading plans precisely as I lay them out, before the trade. It sounds simple but believe me, it isn’t, but is just what the doctor ordered for getting back on the proper trading path.

Since that time I have gone ahead and added JNS, BRKS, BRCM, TNK, IRBT and BYD. BRKS is down slightly, BRCM up slightly, and the others are just about flat. JNS is the winner so far with a  decent run, but looks to have much more room.

From a technical perspective they all look good and are acting fine. The standout at this very moment, as far as one that looks on the verge of moving out has to be the IRBT. While the stock closed Tuesday right around where I bought it, it looks as if it wants to move out of the most recent consolidation phase and possibly push out over the long term resistance level of $38.

This name has all the makings of a big time winner but has really hit me hard in the past and has always left a bad taste. On more than one occasion I’ve been in the name as it is looking ripe for an upside move only to have them miss out on some government contract and the stock plummet to its abyss. It is for this reason I will not overweight the name and stick to my 5% rule, which I’m already at so there is no need to add shares.

At the moment I’m comfortable with the risk of these positions, like how I’ve slowly worked into them and am willing to accept the outcome, whatever it may be.

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