Surfing Markets

Trade Journal

12. SBRY – 03.May.17 – 03.May.17

Weekly Chart


SBRYWeekly

SBRY continues trading within the range it has been in since Oct. 2014. MACD histogram has been trending bearishly since January, reflecting gradually declining upward momentum.

Long Daily Chart


SBRYLongDaily

The long daily chart shows a recent uptick in volume, suggesting more volatile times for this stock may lie ahead. I note that the most recent candle overshot a line of resistance I identified at 279.29p.

Short Daily Chart


SBRYShortDaily1

The most recent candlestick suggests an exhaustion move has been made an a reversal is imminent. Price has also reached the upper price channel. MACD histogram is nearly as high as its highest value in 200 trading days. There is something of a bullish divergence evident in Force Index.

I will short this stock tomorrow morning. I will place my initial stop at 293.5p, per my stop loss formula. I will place a limit order to cover my position at 268p.

Entry: My order to open was filled on 03 May.17 at 273.4p.

SBRYShortDaily2

Exit: My limit order was filled on 03.May.17 at 267.5p for a gross return of +2.16%.

Follow Up


11. SSE – 28.Apr.17 – 08.May.17

Weekly Chart


SSEWeekly

SSE is not trending. It is arguably trading in a range whose upper and lower bounds were established between Dec. 2014 and Feb. 2016.

Long Daily Chart


SSELongDaily

The long daily chart reveals an uptick on volume recently, which may suggest that a full blown down trend in forming or that a period of increasing price volatility is beginning. This chart also shows that this stock reliably reverses direction upon reaching or breaching the lower price channel and then rebounding at least to the 22-period EMA.

Short Daily Chart


SSEShortDaily1

A bullish divergence between Force Index has developed. MACD histogram has ceased growing more negative, signalling stalling downward momentum. Together with this stock’s history of reversing direction after reaching the lower price channel, indications appear strong that this stock’s price is set to rise in the immediate future.

I will purchase this stock at the open of the trading day tomorrow. I will set my stop loss at 1329.5 per my stop loss formula (x=3). I will exit by limit order that I will place in the vicinity of the 22-period EMA when think I have a better idea of how far and fast this stock’s price is going to rise.

Entry: I entered a long position on 28.Apr.17 at 1393p.

SSEShortDaily2

Exit: I closed my position by limit order on 08.May.17 at 1442p for a gross return of +3.52%

Follow Up


10. TSCO – 24.Apr.17 – 26.Apr.17

Weekly Chart


TSCOWeekly

TSCO does not appear to be trending, although it is possible that a nascent uptrend is gathering steam. Something of an inverted head and shoulders formation may be taking shape, although at this stage it is too early to tell. At any rate, no developments at this time frame seem to be worth taking into consideration when evaluating price action at the shorter time frames I trade from.

Long Daily Chart


TSCOLongDaily

The long daily chart shows that TSCO has breached its lower price channel and that this stock is fairly reliable about rebounding quickly after having reached this price level. It is clear though that it is entirely possible that its price may continue falling for some time and that further signals are needed to justify taking a position at this point.

Volume has increased lately. This may signal that the the recent price down trend is coming to an end or possibly a transition to a regime of greater price volatility is taking place (or it may signal nothing at all).

Short Daily Chart


TSCOShortDaily1

The short daily chart shows a bullish divergence between Force Index and price. MACD histogram confirms stalling downward price momentum. I am satisfied that there is sufficient reason to anticipate a price rise is imminent.

I will open a long position tomorrow. My stop loss will be placed at 160.9p per my stop loss formula. I will probably place my limit order to take profit in the vicinity of the 22-period EMA. That will entail adjusting the level of my limit order at the end of each trading day.

Entry: I opened a position from the long side on 24.Apr.17 at 177.1p.

TSCOShortDaily2

Exit: I was unimpressed at the weakness of volume underlying TSCO’s price rebound on 24-25 Apr and revised my limit order downward to the 180p line of support and resistance. My order was filled when price reached this level on 26.Apr.17. My gross return for this trade was +1.64%.

Follow Up


9. SBRY – 07.Apr.17 – 10.Apr.17

Weekly Chart


SBRYWeekly

SBRY continues to trade within a range whose lower and upper bounds were established roughly around Dec. 2014 and Apr. 2015, respectively. I see no indication that a breakout is imminent.

Long Daily Chart


SBRYLongDaily

As I’ve noted before, SBRY bounces around pretty reliably inside its price channel. Prices that reach the upper or lower channels are usually followed shortly thereafter by reversion of prices towards the 22-period EMA.

Volume has been in general decline since late 2016. I interpret this to mean no major change transition from recent price behaviour exhibited over the past 500 trading sessions is afoot.

Short Daily Chart


SBRYShortDaily1

SBRY’s most recent candlestick forms a textbook kangaroo tail, which in this instance indicates that a price rebound is imminent. The fact that the kangaroo tail has formed near the lower price channel reinforces the strength of the bullish signal This interpretation is further supported by a bullish divergence between price action over the last three trading sessions and Force Index. MACD histogram also shows stalling downward price momentum.

All indications point towards an imminent bullish price reversal. I will open a long position tomorrow and place a stop loss at 240.4p.

I will be leaving next week for almost a week and will not have reliable access to my trading account during that time. I will therefore close my position on Monday 10.Apr.17 and take whatever profit (if any) that may have accrued.

Entry: I opened a long position on 07.Apr.17 at 258.9p.

SBRYShortDaily2

Exit: I closed my position on 10.Apr.17 at 261p for a gross return of +0.81%.

Follow Up


8. MRW – 13.Mar.17 – 15.Mar.17

Weekly Chart


MRWWeekly

MRW has been in an uptrend for over a year. There is a bearish divergence between price and MACD histogram evident in this chart which raises the possibility of a correction or trend reversal may develop in the coming weeks.

Long Daily Chart


MRWLongDaily1

MRW’s price fell on 09.Mar.17 to 230.8p, around .5p below its lower price channel. This stock has demonstrated a fairly reliable tendency to reverse course after breaching its price channels.

Short Daily Chart


MRWShortDaily1

MACD histogram is nearly as low as it has ever gotten over the past 120 and 500 trading sessions. Force index over the past two trading days suggests the selloff on 09.Mar.17 may be over, at least temporarily, and that a price rebound is imminent.

I continue to believe that the longer term charts are bearish, but in the short term I think it is likely that this stock’s price will rebound to somewhere within the 237-240p range. I am therefore going to take open a long position tomorrow morning. Because I am less confident about this call than I would ideally like to be, I will be using a wider stop where x = 15 (see here for details). The size of my position will therefore be smaller than it would be if I used my usual tighter stop loss. I will place a limit order to sell at 240p and monitor closely to sell at a lower price if it looks to me as though price will not climb to that level.

Entry: I entered a long position on 13.Mar.17 at 234.2p.

MRWShortDaily3

Exit: I closed my position on 15.Mar.17 at 240.0p for a gross return of +2.48%

7. MRW – 7.Mar.17 – 08.Mar.17

Weekly Chart


MRWWeekly

MRW has been in an uptrend for over a year. There is a bearish divergence developing between price and the MACD histogram, though this is not necessarily significant for a short duration trade.

Long Daily Chart


MRWLongDaily1

This stock is fairly reliable about reversing course when price breaches the upper and lower moving average channels. Volume has been falling steadily since hitting a late September peak, which suggests weakening support for further price gains and a possible correction or trend reversal in the not-too-distant future.

Short Daily Chart


MRWShortDaily1.jpeg

MACD is ticking up and prices have recently bumped up against the trend line. Force index is weakly tracking with price.

I have seen more promising charts, but I have decided to bet on a brief small price rise. I will enter a long position tomorrow morning as close to the opening bell as I can. I will set a limit order to sell at a conservative 249.0p. I will place my stop loss at 237.5p.

Entry: On 07.Mar.17 I entered a long position at 247.2p

Exit: On 08.Mar.17 I closed my position at 249.0p for a gross return of +0.73%

Follow-up


MRWLongDaily3

My exit was well timed. Had I not gotten out when I did, I’d have stopped out at a 3% loss.

6. SBRY – 12.Jan.17 – 26.Jan.17

Weekly Chart


sbryweekly

SBRY has been in something of an uptrend over the past month but is well within the trading range established roughly from late 2014 to early 2016. The latest bar on the weekly chart, with its long upward-pointing wick, may signal that the latest uptrend is about to reverse.

Long Daily Chart


sbrylongdaily1

The long daily chart shows that SBRY reliably bounces around inside its moving average price channel. On 11.01.17 it breached its channel, putting in an extremely high wick that reached 277.1p before closing lower than it did the previous day. Historically, this type of candle precedes a price decline.

Short Daily Chart


sbryshortdaily1

In this chart, in addition to the bearish candlestick formed on 11.01.17, a bearish divergence between price and MACD histogram also appears to be forming. Force index is strongly positive, which in itself is not necessarily a bullish or bearish signal. On the strength of the bearish signals presented by the price channel breach, the bearish candle and the bearish divergence between price and MACD histogram, I have decided to open a short position on 12.01.17. I will set my stop loss at 276.9. I anticipate covering this position when my analysis indicates that the price decline I anticipate is in or is about to reverse. However I will also place a limit order to cover the position at the lower channel bound, currently at 237.47. I will update this limit price on a daily basis and will adjust my stop loss per my rule.

Entry: On 12.Jan.17 I entered a short position at 259.0p

Exit: On 26.Jan.17 I covered my position at 257.5p for a gross return of +0.58%

SBRYShortDaily22

Follow-up


SBRYShortDaily3

In retrospect I might have gotten a better price if I had waited a bit longer, but on the whole my exist was fairly well timed.

A Future Blog Post

Is forthcoming.

5. SBRY – 11.Nov.16 – 15.Nov.16

Weekly Chart


sbryweekly1

My analysis from the weekly chart is as it was before: SBRY has been in a trading range since September 2014 of about 290p at the upper bound to around 220p at the lower bound. I see no indication that SBRY is about to break out of this range any time soon.

Long Daily Chart


sbrylongdaily1

My analysis from this chart is similar to the analysis of it I made the previous evening. As I’ve noted before, this stock moves fairly predictably within its price channel. Upon hitting or exceeding its price channels, it usually snaps back  at least to its 22-day EMA, and often to the other price channel. This stock has a tendency to make large, rapid price moves.

Short Daily Chart


sbryshortdaily3

Recently this stock has undergone a sharp and rather forceful price decline. Its price is now below its lower price channel and is now in the vicinity of a level of support I’ve identified (~232p). Previously, acting under the belief based on erroneous data that the recent downward price moves had been far more forceful than they in fact were, I entered a short position on 11.Nov.16 at 230.3p. When price subsequently rose rapidly to 234p, I checked the historical price data for this stock as documented on the Financial Times and Yahoo! Finance, which showed the selloff to be less dramatic than what I had previously believed it to be. I closed my short at 234.7p and reversed my position.

I will regard any strong move against me to be a signal to close my position and wait for new EOD data to be published before reevaluating if I want to trade this stock and from what side. I am provisionally setting a limit order to close at 240p.

Entry: On 11.Nov.16 I entered a long position at 234.7p.

Exit: I closed this position on 15.Nov.16 at 240.3p for a gross return of +2.39%SBRYShortDaily2.jpeg

Follow-up


sbryshortdaily3

Subsequent price movement since I closed this trade seems to have vindicated my decisions to reverse my initial short position and to close my long position when I did.

4. SBRY – 11.Nov.16 – 11.Nov.16

Weekly Chart


sbryweekly1

SBRY has been in a trading range since September 2014 of about 290p at the upper bound to around 220p at the lower bound. I see no indication that SBRY is about to break out of this range any time soon.

Long Daily Chart


sbrylongdaily1

As I’ve noted before, this stock moves fairly predictably within its price channel. Upon hitting or exceeding its price channels, it usually snaps back  at least to its 22-day EMA, and often to the other price channel. This stock has a tendency to make large, rapid price moves. Most recently, its price has fallen rapidly on heavy volume.

Short Daily Chart


sbryshortdaily1

The last two days SBRY’s price has fallen rapidly from its upper channel to below its lower channel. As of 10 November, its price has reached a support level in the 232 vicinity. Normally I would look for an indication that its price decline has ceased, then trade this stock from the long side in anticipation of its price rising at least to its 22-day mean. However, given the large gap down on heavy volume on 9 November, followed by another large price fall on even larger volume the following day, I am considering shorting this stock. This selloff looks unusually strong, as indicated by Force Index, and I think it may have further to fall.

sbryshortdaily2

In fact, two consecutive large drops in price on atypically high and rising volume is extremely unusual for this stock. I’ve looked its chart going all the way back to January 2000 and have only found a few instances of this happening. Above are two such occasions, and in each of them, as well as in other examples not shown, price continued to reach new lows for at least a third consecutive day.

On the strength of the downturn, I will short this stock at the open the following morning. I will consider any move to the upside to be an indication that I have made an error and will close my position. I will provisionally set a limit order to cover my position at 225p.

Entry: I shorted this stock on 11.Nov.16 at 230.3p (£2.303)

Update


Almost immediately after opening my position, the trade went against me. By around 9:00, an hour after the opening bell, the price had already hit 234.7p and showed no sign of reversing direction. This certainly surprised me, given how forceful the selloff of the previous two days had been. On a hunch, I happened to check SBRY’s historical data on sites I don’t usually use (Financial Times and Yahoo! Finance) and discovered that the data I had been relying on (from Google Finance) was almost certainly incorrect. The forceful selloff I based my decision on was, according to these two sites, not nearly as great as I’d previously believed. The chart I should have been basing my analysis on is shown below.sbryshortdaily3

Given this new information, I immediately decided to cover and reverse my position. That trade is documented in the next journal entry.

Exit: I covered my position at 234.7p (£2.347) for a gross return of -1.91%.