Southern Copper (PCU) Technical Analysis, Continued.

PCU took a hit today, along with the rest of the market. PCU was able to close above the 50-day MA on Monday and last Friday. It bumped up against its former trendline, and closed below the 50-day MA today. Check out the chart below - the recent action is interesting - I'm not quite sure where its heading but I'm taking a slightly bearish stance for the next few days.

Dow Jones Industrial Average - Heading Lower Tomorrow

Tomorrow will be interesting for the market. The Dow Jones Industrial Average looks as if it's ready to fall. As you can see in the chart below, it is running into resistance at its 50-day MA and its downward trendline. Stochastics is overbought and hooking down. From the looks of it, the DJI is going to head lower tomorrow. (click image to enlarge)

Wild Action in Southern Copper - PCU

PCU was able to bust through that downtrend roof I was talking about yesterday. The volume, however, was not impressive - and stochastics is reaching overbought territory. I think PCU may have trouble closing above its 50-day moving average - plus the 20-day MA is declining overhead and the former trendline could also become resistance. I'm hesitant to buy here - I'll sit back and watch to see if it can overcome this resistance around $102.


Here's the same chart, but it shows the violent swings PCU has undergone recently. If you had bought it last week at $80 you would be up 25%! If you had panicked out at $80, you would have been down 30% from the top. This is what swing trading is all about - trying to take advantage of ridiculous, illogical, and violent short term moves in stocks. These moves have nothing to do with the fundamentals of the company, ie. their earnings, and are mainly due to the short term mechanics of the market.

Southern Copper (PCU) Chart

I sold my 22 shares of PCU last week, on 8/14/07 at $97.56. I had purchased them on 2/27/07 at $69.57. That's about a 40% gain - too bad I didn't buy more than 22 measly shares. PCU has a dividend yield around 7%, so I might have to buy PCU again before the next ex-div date.

Interesting chart here for PCU. It seems to be running in a downward channel, which began last month. It fell under its long-term trendline, which had been supporting the stock since January. For some reason I think PCU will bust through the channel's roof. I'm kind of hoping that it won't, however, and give me the chance to buy. (click chart to enlarge)

FLR Swing Trade

Last month I swing traded 50 shares of Fluor (FLR). In past posts, I discussed my entry and tracked the progress of the trade, but I never gave a final update after I exited the trade. This post will go over when and where I sold. In case you missed my first posts regarding this swing trade, here they are:

• Fluor Corporation (FLR) - Swing Trade
• FLR Watch
• FLR Upgrade! - W00t W00t W00t!
  
• FLR Update

Here's a table showing an overview of the trade (click to enlarge):
The following chart shows where I bought and sold on a 6-month, daily chart:
This last chart shows a detailed (60-minute candles) view of my entry and exit. You can see that I raised my stop-loss order too high - to $112.50. I should have given the stock more room to maneuver, but I didn't, so I missed out on some potential profits. Regardless, an 8.5% profit in 5 trading days isn't bad. This was a well planned trade, and well executed.

Garmin (GRMN)

I own a Garmin GPS for my car and it rocks. I think they may be poised for a highly profitable holiday season - and the stock could run up.

The stock hit an all-time-high, $105.75, just last week. Today I purchased 30 shares at $88.82 - that's about a 16% drop from the top. You can see my entry point in the charts below.

This is a 5-month, daily chart of GRMN, showing that it is still above it's trendline.

Here's a 5-minute chart showing today and yesterday. You can see my entry point.

OMFGWTFBBQ This Market is Getting Destroyed

I sold my 50 shares of SLB in Pre-market trading at $85.30. Thats 13% down from its all-time-high around $98, which it hit a few weeks ago. I sold my 17 shares of TM for $112.38. SLB is currently trading around $83, TM around $111. PCU is getting hammered, down 13%, trading around $77 - glad I bailed out of that one. RIO is down 9% and trading around $36 - unbelievable.

I couldn't resist my urge to start small positions in Garmin (GRMN) and Fluor (FLR). Probably not the best idea to go long in this market - but if they drop I'll just buy more because I don't mind investing in them long-term. I bought 30 shares of GRMN at $88.82 and 30 shares of FLR at $110.

Materials stocks are getting hit the hardest. Consumer stocks are doing well. Pepsi (PEP) and Procter & Gamble (PG) are actually up today.

At this price, PCU now has an 8.3% dividend yield. That's hard to resist.

This Market is Buck-Nasty

Wow. Today's market is pure ugly. Stocks that led the way up over the past few months are now getting clobbered. Check out the destruction in RIO, POT, FLR, and PCU. Good thing I sold my PCU yesterday - it's down 7% today. I still have SLB and TM. SLB is holding up alright and TM isn't faring as well. I don't like this market action. I think it's time to sell and let market work out its problems. I may consider shorting if the market bounces in the next few days. I don't have much experience shorting - I usually only monitor high quality, market-leading stocks. Guess I'll have to start looking for some real stinkers.

Don't Panic

Jim Cramer always says "Nobody ever made a dime panicking." I'll give you an example of Jim's advice in action.

On July 24th my Scottrade account was at an all time high. Then came the market sell-off - my stocks got hit pretty hard (SLB, TM, and PCU). On Monday morning, I was $900 poorer than I was on July 24th. I was cursing myself for not selling at the top - for not avoiding the $900 "loss." I experienced fear and panic as I watched my account get a smackdown. By Monday, I'd had enough and I was seriously considering selling everything to avoid more losses. Luckily I managed to keep my cool and stay in the game - yesterday and today my stocks bounced hard and now I'm only $300 from my all-time high. That's a $600 bounce in 2 days. W00t W00t!

The lesson: If you begin to panic as you see your account rapidly lose money, it's probably not the best time to sell. The time to sell was at the top, but too bad Champ, you missed it. Wait for a bounce instead of freaking out like everyone else.

This all has to do with greed and fear. Here's what goes wrong: As you watch a stock skyrocket, you get greedy and wish you were making money like everyone else - so you unwittingly buy at the top. Then everyone starts bailing, your stock plunges - you panic and sell at the bottom. Check your greed and fear at the door - Sell on the way up and buy on the way down.