POT trade

[rosey]

I am a tad nervous about posting this but hope i can learn something from you so called experts
have been looking at a trade with POT so have done so and as you can see from the chart have shown what i have done
plan to sell 75% of holding at exit of 5.80 and next day if is above then will move stop loss to 5.80. If it does not do that then i will sell the other 25% Sorry dont no the tea lady or truck driver or how to draw a time line (maybe someone could for me) or how to get the chart smaller so you dont have to scroll it but no doubt i will be told
all comment and critisisum greatfully received (cant spell either)
thanks in advance
Rosey


http://img.villagephotos.com/p/2005-1/933154/POT1001.jpg

[rosey]

a couple of other questions
1 is this the right share to try this with if not what would you guys recommend
2 am only trading with in support and resistance if out side those areas then dont hold the share
3 container volume and log volume increase will determine a move up not sure when next report is but it should be soon
4 maybe i was a little hasty in lifting stop and should have left it at the first level of 5.40
5 am going to be away from computer on thurs and fri to see out come so am i safe
thanks in advance
rosey

[Paper Tiger]

I don't see tea ladies, truck drivers or wharfies being anything to do with this. Especially I do not see that this has ANYTHING whatsoever to do with the now infamous timelines. They are all more longterm things.

You have identified a trading range for POT, bought in at the base and are chasing it up as far it goes or $5.80. Perhaps a little silly to be doing this if you are away for two days, these are pretty tight stops.
So end of today are you setting another tight stop to protect any profits?

Personally while it is going up I would keep it and the greater your profit the more relaxed the stop rather than get out at $5.80.

Hope it works out well for you.

[Steve]

Rosey, we shall follow this trade with you, and congratulate you if you get it right or criticise you if you get it wrong.

Thank you for this opportunity...:D

[KJ]

I see that they report their HY today-result will need to be better than expected -trend is generally down unless the result is outstanding-good luck.

[Liberty]

Hi Rosey

Good luck. One observation though: your stop at 540 appears to be a support level. Does this mean that you would have sold if POT had retraced back to 540? Or if the 540 support had not held?

My standard practice is to set my stop below the support level (in this case 539) - if it is then hit, there exists sound evidence of technical weakness and thus good reason to exit the position.

[Phaedrus]

Rosey,
You have made a good entry here - well done. I can give you a few ideas about exits, but only time will reveal the "right" thing to have done.
First, your questions :-
(1) Is this a suitable share to try this with? Yes. It is a sound stock in a good longterm uptrend. It would not be so good if you were trading large sums of money though, because of limited liquidity - average daily turnover is less than $700,000. A rule of thumb is never attempt to trade any stock where your trade would account for more than 10% of the daily turnover.
(2) I am only trading with support and resistance if out side those areas then dont hold the share The support and resistance you speak of has little history and lies with an obvious "flag" formation. This is not a lot to base a trade on.
(3) Container volume and log volume increase will determine a move up Quite possibly.
(4) Maybe i was a little hasty in lifting stop and should have left it at the first level of 5.40 Maybe, maybe not - only time will tell.

Some observations :-
(1) In the short-term, POT has been making lower highs. In these circumstances, it is not wise to use a previous high as a price target.
(2) The "Dragonfly" Doji of yesterday looks good.
(3) You set your Stop-loss at $5.40. Not good for 2 reasons (a) That was previous support - it could easily drop to that level, find support again, and rise. You will have been flicked out. Best to set your stop-loss just under a previous level of support. (b) Support/resistance is often found at whole numbers. Many people set their stops and targets at whole numbers. Obvious conclusion - never set your stops or targets at whole numbers. This might seem a trivial point, but I believe that in this case a stop set at $5.39 (or less) would be much better than the $5.40 you used.
(4) You plan to sell 75% of holding at exit of $5.80. If POT gets to $5.80, it has broken out from the flag formation. A good time to buy, not sell, though I appreciate that you have planned this as a short-term trade.
(5) In other words, I think that $5.80 is too high for a short-term target (flag continues) or too low for a longer-term target (flag breakout) You fall between 2 stools, missing out either way.
(6) I would make the target a bit lower, but aim to take it on the way down, rather than on the way up That way, you have this thing covered. Either way you have done the right thing.
(7) Oscillators are superb for this type of trading. You don't seem to have considered their use at all.
(8) You have a plan of action if this stock does something, and a plan of action if it doesn't. That is really good. Many traders are not that organised!
http://home.ripway.com/2004-7/148483/POT223001.gif
Don't forget that flags like this are a continuation pattern - in other words, a break to the upside is the most likely resolution here.

[duncan macgregor]

ROSEY, the fundamentals of the company are good. The port sector forecastes dont look bright. LPC union problems, POA has a potential union problem is the whisper from the tea lady, and POT is the best of the bunch in a sector going sideways. When the dollar weakens get back in for a nice trend up. MACDUNK