The prior two posts show a daily and intraday chart for Tupperware Brands (TUP) which I purchased on March 31st for an average price of $38.68 per share and again on April 1st for and average price of $39.77. I ended up selling it today near the open @ and average price of $40.93. Overall this was a nice, profitable trade, though the length of time I was able to stay with the stock before my trailing stops hit was less than I'd like to see. The markets right now though are anything but a sure bet, so I'm keeping everything on a very tight leash.
I started my life in the markets as a daytrader. My first dream was to become a pit trader in Chicago's Ag markets, but as technology progressed it became fairly evident that the days of the pit were numbered. I did come across a site though one evening about some new fangled thing called "Daytrading Stocks" and being a "SOES Bandit". The idea was that you could buy at the bid and sell at the ask. EUREKA!!!! Thats exactly the edge I wanted to have in the pits, so I contributed my money to the market god of tuition over the course of several months.
Eventually I learned that short term trading in the volatile markets of the late 90's could indeed be very profitable, but holding onto a stock for more than the simple bid/ask spread was the only way for me to become profitable. At first my approach was 100% technical, and to this day T/A and risk/money managment remain by far my better skills.
I started my life in the markets as a daytrader. My first dream was to become a pit trader in Chicago's Ag markets, but as technology progressed it became fairly evident that the days of the pit were numbered. I did come across a site though one evening about some new fangled thing called "Daytrading Stocks" and being a "SOES Bandit". The idea was that you could buy at the bid and sell at the ask. EUREKA!!!! Thats exactly the edge I wanted to have in the pits, so I contributed my money to the market god of tuition over the course of several months.
Eventually I learned that short term trading in the volatile markets of the late 90's could indeed be very profitable, but holding onto a stock for more than the simple bid/ask spread was the only way for me to become profitable. At first my approach was 100% technical, and to this day T/A and risk/money managment remain by far my better skills.
As time progressed I became more and more involved in managing other peoples money, and less involved in education. My style evolved into one that included both Technical and Fundamental criteria's, and generally a timeframe that is measured in a timeframe of weeks and often months. As I said earlier though the markets right now are not exactly in prime condition, so I'm keeping everything very close to the vest.
The setups that I got in TUP is by far, in my opinion, the best way to get into swing/position trades. I love nothing more than to have a daytrade entry that allows me to get in for less risk, but hold on for the potential gains of a swingtrade or position trade. You can see in the case of TUP that several months ago it had a very powerful move to the upside, then as the overall markets collapsed TUP held itself together fairly well. This is the very definition of relative strength, which is in my opinion the only technical tool that provides consistent superior returns. So, we now basically have the daily chart covered. Once I have isolated a daily chart that I like I go to work on the fundamentals, reading the annual reports, looking at the data provided by daily graphs and occassionally having Anthony call investor relations if I plan to hold onto a stock for a long period of time.
I was very pleased with the technical condition of TUP, given that it performed so well during the markets snit fit. Aside from a very high debt load, the fundamentals are also pretty appealing. The stock has a relatively low Price to Earnings Ratio, its EPS rating is 87 according to IBD, which means that its done a better job at growing EPS than 87% of all the stocks in the market over the last several quarters. Last quarter the stock saw EPS increase by 26%, just over the 25%+ that I like to ideally see. One thing I also liked is that its Revenue growth is fairly consistent with its EPS growh, so I dont have to worry too much that the growth is manufactured and not organic.
Now the intraday charts. As I said, the best situation you can find yourself in is to have a potential swingtrade or position trade that you are able to get a daytrading type entry on. The reason for this is simply that you have to risk much less when placing your stop loss on an intraday setup than you do using the daily. The downside of this is a slight increase in the number of stop outs you will have, but you simply need to be willing to get back in if the stock/market signals to you that this is the thing to do.
You can see that the first breakout entry occured late in the day on the 31st, and the second one around mid day on April 1st. Both of these daytrade entries allowed me to enter the stock with very low initial risk, and also to be moving my stops up fairly aggressively as well. On my first entry my risk was about 20 cents, and on the second it was around 35 cents. For this very small risk I was able to close the trade out with an average gain of $1.89 per share, which works out to a very nice risk/reward tradeoff.
Not every trade presents the opportunity to get into a longer term idea on a short term setup, but those that do should never be ignored as they can add substantially to your bottom line.
If you have any questions please feel free to ask away.
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