Thursday, January 15, 2009

Picture Perfect

What a great day for this Sykes/Swing trading strategy! As mentioned in my previous post, I'm eagerly anticipating MAXY to break it's $8 support level. Today marked it's third attempt and, despite my previous 'Third time's a charm' wishful thinking, third failure to crack $8. When it couldn't break support after multiple attempts (as evident by today's chart below- courtesy of Yahoo! Finance), I decided to cover 100 shares.


To help you understand why I only covered 100 shares instead of the full 300 (already profitable) shares, here's a fairly detailed time line of thinking and text messaging to my broker (aka. future brother-in-law Eric who happened to be home with Think or Swim's software open:)

Text to Eric (10:01am): Maxy?
Text to Evan (10:15am): Down to 8.10
Text to Evan (10:23am): Low 8.04 back to 8.10
Text to Eric (10:38): Cover 100 under 8.05 if it gets back
Text to Evan (10:45am): Covered 100 at 8.05

I knew that MAXY was flirting with $8, and hoped it would break it- but when it didn't, I opted to play it safe (fearing another spike after another failed attempt). I figured (and this happened to be correct) that I could cover a portion of my shares, lock in some profits, and re-short the same 100 shares at a higher price if it bounced off support (like it did). My re-short of 8.47 basically happened because it was late in the day and I had the option to average up my short position. Below is the screenshot of my Think or Swim account's trading history over the past week to confirm. Could tomorrow be the fateful 'dip into the $7 range' day for MAXY? Stay tuned...


Happy Friday Trading!

Evan
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3 comments:

Anonymous said...

When you buy to cover you can short sell with those shares later on?

January 15, 2009 at 10:58 PM
islandminister said...

Not exactly- they aren't the same shares I covered because I don't need to reserve shares with Think or Swim to short 'easy to borrow' stocks like MAXY (I just go through the same motions I would to sell a stock I already own). I don't even use up a day trade doing it like this because I wasn't closing out any positions that I opened today. I covered shares I had short from an earlier date, then started a new short position in the afternoon. Hope that helps- hit me up with any other questions you may have.

January 15, 2009 at 11:21 PM
Charlie G. said...

You can trade with TOS using their Think Pod site without all the software. I think we rally a little into inauguration but may sink more after that. You are way more patient then me but it works.

January 15, 2009 at 11:50 PM

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