Open Swing Trade Updates For Tuesday December 13, 2011
U.S. stock futures edged higher on Tuesday after encouraging economic-sentiment data from Germany and ahead of the U.S. Federal Reserve’s announcement on monetary policy.
The U.S. economic calendar is busy on Tuesday, with data on November retail sales due at 8:30 a.m. Eastern time. Data on October business inventories as well as job opening and labor turnover will be released at 10 a.m. Eastern.
The spotlight will fall on the U.S. Federal Open Market Committee, which will issue its statement on monetary policy at 2:15 p.m. Eastern. It’s expected to keep the key interest rate at a historic low range of zero to 0.25%. Investors will scrutinize the Fed’s comments on the economic recovery.
The updates below are listed in the order I bought the stock – newest to oldest.
Here is a brief 5 minute technical video covering these open swing trades for today.
HOV – While doing a watch list for most the afternoon Monday I couldn’t help but pick up a small position in HOV. They are due to report earnings Thursday morning before the bell (I don’t hold through earnings) and expected to improve slightly. The short interest on this one is almost 21 days to cover and if you look at Monday’s 1-minute 1-day chart you’ll see how it squeezed a bit from $1.56 – $1.66 and then held $1.62 all afternoon in a bear market. Usually that’s a good sign there aren’t many sellers sitting around waiting to sell their shares after a spike which is why I bought at $1.62 heading into the close. Sure enough it squeezed some back up to $1.66. The goal here is $1.80′s – $2.00 if it can catch flight and continue to squeeze shorts before earnings. Market cap is $157.63 million – right in my $100m – $300m wheelhouse. Beta here is 2.89 so if you catch the right direction it can be lucrative.
GLUU – Short interest 6.74 days to cover with an excellent Beta of 2.41. The market cap is ideal at $213.39 million which appeals to institutional buyers as well as retail like you and I (Institutions are what move stock). I played the market dip Monday for entry and think I timed it pretty well. Stop is at Monday’s low of $3.26 and the upside goal is to let it run until the Zynga IPO prices and opens at the end of the week. An upside goal of $3.80 or better is best case here, I don’t see it running much more than $.25 – $.75 per share in our timeline if I’ve nailed the trade properly.
PLUG – Argh!!! Another low volume drifter in the bear market after good news. I’m done with low volume trades – mark my words. I’m putting a new 10-day average in place and if the trade doesn’t meet that volume it’ll take a lot to get me to consider it. Having said that PLUG is right at the trendline here so if the market starts to pick up today PLUG should too.
HKN – Played the pump and got left out to dry… that’s what I get for playing a pump right?! Real company yes but no volume / attraction outside of of the pump and now I’m just looking for an exit as it drifts lower. Bad trade and you can learn from this – stay away from low volume stocks, liquidity makes the odds a lot better.
USAT – If they can keep this above $1 through December I’ll be really impressed. December as you know is when everyone sells their losing trades for tax write offs and USAT has been trending down for quite some time making it a prime candidate. Other than the loss of Mastercard recently due to increased fee’s I think the upside here is still good for USAT. Given their deal with Verizon we could see headline catching news at anytime which might spark the run I need here. This stocks is light volume like HKN yes, but unlike HKN I still like this trade quite a bit – just timed in wrong. Hold $1 and I’m in and might even buy more shares.
LOCM – So far so good here after shares held $2 and have now put in a higher low at $2.21 making new support. Upside goal remains $2.70 – $3 but I’ll admit this trade has gone on way to long for a winner. You guys know that’s not my style so don’t expect me to make a habit of 1-month holds as a part of this newsletter. Having said that there’s just no real reason for me to sell my shares yet despite having some profit.
“Hi JB. On January 31st I bought STZ call options @ $2.40 on Luke's alert in the chat room and sold them on Valentine's day for $11.20 for a 460% gain. Now that's some serious Valentine Cheddar.”