Because of my day job, I did not have time yesterday to prepare any watch list. In the morning, I logged in to the chatroom started watching alerts. CROX was a popular alert and it was falling down sharply. It was moving down fast but I did not chase it. [‘No Chasing’ is one rule which I follow very strictly even though it pinches a lot].
In chat room, I saw alert by Adam Brooks on BEE. I looked at the chart and it looked like a PERFECT chart to short into. BEE was moving up for 5 days on no news and it went RED. I shorted 600 shares at 5.84.
BEE Trade 5th November
I really like how BEE behaved. It was not fast and furious. It was slow and steady. In real life, I get bored by slow things, but I have found that when it comes to stocks, I like these slow guys. They give you time to look at the chart and make decision whether to close your trade or not. As of this writing, I am up by 500$ on this position! This trade could be my biggest gainer so far.
There is only one problem. BEE announced earnings after market. I was not aware that they were going to announce earnings otherwise I would have closed the trade. As Torello says it’s just too risky to do trades based on earnings news. I put an extended hours order to close my position but it was not filled. The good thing is that BEE declared loss, but the bad thing is that the loss is less than what analyst expected. I have no clue what the stock is going to do tomorrow. I will be closely watching pre-market to see if it is going to move up. If I feel that it’s going to move up, I will get out in pre-market itself. Lesson learnt is that if you are going to hold overnight, make sure that no earnings news are going to be published in near future. I think it will be wrong to say that I did not know that. I closed my ABK trade yesterday because they were declaring earnings (or rather losses) today and ABK tanked 40%! It’s just that for BEE, I did not try to find out if there is any earning news or not. Well, we will see how it goes. If BEE doesn’t gap up/down and continues the slow downward movement, I will hold it otherwise I will close it. I hope I can book some gains.
Finally, I would like to thank Adam for this very nice alert.
Happy trading!
RJ.
Status as of end of Nov 5th:
Open Positions: BEE 600 shares short at 5.84$
3 responses so far ↓
1 YngvaiMalmsteve // Nov 6, 2008 at 10:32 pm
Nice trade on BEE! Hopefully it will stay down tomorrow.
The TOS day chart usually shows a $ sign at the bottom if earnings are coming out in a day or two, so that’s always something to watch out for.
2 iltorello // Nov 6, 2008 at 10:34 pm
RJ nice work!!! I like the slow movers also, especially when you’re just trying to grow your account. The trading pros such as Tim and Muddy don’t play earnings and that’s where I learned to stay away from the ER’s. It’s basically gambling. Great job once again!
3 My First Big Winner Realized - RamtaJogi // Nov 7, 2008 at 12:24 am
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