Mega retailer Amazon (AMZN) reported killer earnings after the close. Along with Google (GOOG) this is one company that is "hot" that I love. I buy almost all my stuff at Amazon, the pricing and fast shipping cannot be beat. This further cements the idea to me that big floor space stores are going the way of the dodo bird. No need at all. When I look at commercial real estate funds going bananas to the upside I wonder if this new way forward has even been considered. How many Chipotle (CMG) joints can be built or place din empty mall space? Keep this in mind for the longer term, retail space is entering a long downtrend.
What's Your Problem, Kazanski?
It is always much more fun to report on some killer trade (FURX) than to highlight a mistake I have made. Still, most lessons are learned from mistakes so here we go.
I was stopped out of ASYS today for -2%, and I am looking to drop GFIG for a small gain tomorrow before earnings on Thursday. Those were not mistakes, just trades that did not do what I was expecting.
My mistake was in the CSU trade. Here is a chart for reference:
What I saw was a stock at the lower end of an established trading range ($8.60-$9.70) that was at the lower support area. You can see my buy call as volume came in to support the stock and I bought in around $8.80. My target run for this name was to around $9.60-$9.70 which would have been a good 10% gain. All went well, in fact on a scale of 1-10 with 1 being a trade to kill boredom random pick and 10 being insider information from Martha Stewart I would have rated this one an 8. I tend to size my positions based on my confidence in the idea.
So I sold Friday at $9.65 right? WRONG!
As I was looking over the stock on Friday I actually said to myself "What's your problem, Kazanski" from the film Top Gun. Everything was in place and ready to go. What happened? I did what all idiots do when trading, I changed my trading idea while still in the position, directly in the face of facts not in evidence.
I was thinking that this run to the top of the channel may be a breakout possibility with more upside. Was there more volume coming in to push the price up? No. Had the action even broken in to the first resistance area before a breakout, around $9.80-$10? Not really, not with any conviction. So why did I let it ride? No idea, hope or greed I guess.
In any case, I had another shot to sell on Monday but got a bit busy at work and missed it. Right now CSU is looking like it is making a run to the bottom of the channel and a solid 10% win will probably be a small gain or a close out at 0%. Not every mistake will cost you a big loss, but missed gains add up just the same.
If you ever change your idea on a position you need to go through a checklist that will objectively answer your new idea. Had I really looked at the volume and price along with the candles Friday or Monday it was clear CSU was not making a big run. In fact, it may have topped out for the near term and earnings are Monday August 1. Trading is fun, right?
Have a good night.
1 comment:
No Points For Second Best!
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