Palladium and how to play it

If a picture is worth a 1000 words, then this one is worth at least 10,000!! So, am just going to show the chart and shut up!



Like it?? It gets better....It touched 450 today after hours!!

Well, the thing is that palladium is an extremely rare metal, so there are not too many palladium plays out there. And unlike gold, palladium is widely used in industry, namely the automobile industry. I guess the huge car sales in China kinda help!!

SWC happens to be the largest miner in North America.



PAL is a smaller, more diversified miner. This little guy has had a parabolic move up and still refuses to give up!



PAL had a nice move up today and is on 52 week highs and SWC didn't have a similar run today inspite of being a pure Palladium play which PAL isn't. As you can see in the chart below, the two stocks tend to move together with PAL being more volatile of the too. It wouldnt be wrong to expect SWC to play catch up tomorrow.



Let me know if you have any other nice picks for tomorrow!
Good Luck!

Update: Here's the real time link for Palladium in case any of you decide to play it

All that glitters just might be gold!

I stumbled across a pretty interesting chart. I had noticed earlier today that the gold miners were down in spite of an up day in gold. So, I had a look at the chart of the gold bugs index ($HUI) a little while back. And its at a very interesting position!!

$HUI is indicating that gold miners are a screaming buy right now!! Its right at the top of MA(20) and above an important trendline. Now that's what I call a low risk setup with an obvious place to set up your stop. If gold cooperates there is no reason why we should not see a decent bounce in the gold miners from here.



And it gets even better, here is a longer term chart.



BTW, if you like the above chart, wait till you see the Palladium chart!! I will post those later tonight.

Here are a few gold miners that I keep track of. While the individual charts are not that impressive, I like these plays because of the above shown overall gold bugs index chart.

If you want to pick a setup that has shown considerable strength even during gold's recent correction, then EGO is the pick for you. Hasn't suffered a major correction like other gold stocks. In fact, it was up today too despite the gold miners index being down. Watch out for a clean break of 15.



AUY - MA(20) providing support. So your stop point is obvious.



NGD - A smaller miner. I like it over 4.40



GG



XRA - A break of 8.50 and we are off to the races again!



Palladium just made new 52-week highs even as I was preparing this post. I will post about it later tonight.

Good Luck tomorrow!

Position update

Took a small starting position in SWC at 12.58. Might add if it shows signs of strength. I really like Palladium here as it crosses the important level of 440. Wont get time to concentrate on the markets till later in the trading day, so not taking too many chances here.

Hope some of you benefited by the NEP call last night! I see it made a 7% move earlier in the day. I didnt get a chance to see the markets until now so missed it.

Will do a detailed post on Palladium and Palladium manufacturers later this evening.

Good luck!

13:03 Still liking it here. But am waiting for the volume to come in before adding more. Volume not impressive right now.

13:34 Facing huge sell block at 12.70. Should add if it manages to overcome that.

13:43. Most of that block gone but obstacle remains. I am trying to be patient here. Which is something that doesnt come naturally to me.

13:46. Added at 12.72

13:48 Bought some WYNN at 71.84. Finally saw some volume coming in it. Wont be able to watch the markets for the next half an hour now.

14:32 Very small position in CSIQ at 28.30. Stupid?? I know!!

14:50 Keeping an eye on 28.71 for CSIQ

15:41 Into NEP at 10.35

15:59 Sols CSIQ for 28.09 for less than 1% loss. It didnt pass my "sleep" test.

NEP

Not much to say here but I just wanted to brink this stock to your attention. If you have read my introduction, you know why this is and will always be my favorite stock. It has been consolidating in the past few days after a parabolic move. I rather liked how it closed close to its high of the day today. I wouldn't say its a buy because right now I think that no stock is a definite buy as this market will move on news. But this is one stock that should definitely be on your watchlist.



Good Luck tomorrow!

Daily review - January 13, 2010

The market started up. The market went down. The markets went up. The market consolidated. The market went up. And that's pretty much it. If this review shows my disinterest in the markets right now, I do not apologize for the same.

The morning session was actually pretty crazy. Most of the momentum stocks were actually a pretty wild ride. Let me give you an example here - CAGC, our chart of the day yesterday. It was down almost 7% in the morning and ended the day up almost 7%. Good Luck playing that! Actually you could but if you are a small account trader like me and have to live with the pattern day trader rule, its not worth the risk of getting stopped out repeatedly and not being able to day trade for the next few days. And make no mistake - if you cant day trade in this market, you don't trade. Of course, you could be a masochist!

I could put charts of the individual indices here, but really, what's the point? Job numbers come out tomorrow, so the market will react to that. JPM reports on Friday and that's what I am waiting for. Let the big boys start reporting and then we should get a fair idea on how to play the earnings season.

Personally speaking, I entered into one small trade today - FAZ. I blogged about it earlier in the day. I was quick to get in and sure enough, was quickly thrown out. After that, I just didnt feel like trading today. I haven't felt like this in a long, long while. I have been trading a lot since December and have done pretty well during this time period. But today, I just didn't feel like it. In fact, I wasnt even seeing the markets, except for an occasional peek at cnbc (the site, never the channel!!). Why could this be? Well....

1) After the stupid mistake earlier in the morning, I was punishing myself by not entering any other trade
2) I didn't want to enter any trade since I knew I wouldn't be able to watch the markets till around 11 tomorrow.
3) I knew I didn't have an edge in the market, so I didn't trade.

I would love to say it was just 3, but honestly speaking, I suspect it was a combination of all the above.

How to trade the next few days? Let the volatility be your friend. If you absolutely do have to trade, don't try picking the top or the bottom. You don't have to get the entire move in the stock, just the meaty part of it. That's how the best traders did it and still do it.

I might post a few picks later tonight. If you want any stock analyzed, just leave a message in the comments section.

Good Luck tomorrow! Be careful out there!

Ever got into a trade and wondered why you did it? - Learn from my mistakes - Part 1

Ever entered into a trade and wondered why you did it? I don't mean regret after you see the trade going against you. No. I mean regret it as soon as you click on that place order button.

Take my FAZ trade today for example. As soon as I placed the trade, I asked myself - Now, why the hell did I do that? Well, I didnt know then and I dont know even now. I cant show you any charts to back my entry. Cant say that it was through any news. Cant defend myself by saying that I was reading the tape. But the bottom line is I still entered the trade. All I can say is I thought the market was going down and I did it. Then, one might ask why FAZ? Why not an inverse S&P ETF? After all, my feeling was about the markets in general and not financials in particular. Why not go with my chart of the day from yesterday - CAGC - which actually went as low as down 7% today? Like I said before, I have nothing to say that could back my actions.

I will share with you why I do it though - Its the feeling of being in the game!! Its the thrill of it. Its the feeling of participating in the market. Are any of these the right reasons for entering a trade? Absolutely no! Added to the fact that I showed fair bit of patience yesterday made me feel impatient today.

What's the solution? Simple! Dont do it!! Haha!! If only it were that easy. But there is light at the end of the tunnel. Take my example. I know myself and I know I make such stupid moves. So, when I know that I am about to enter a trade that I cant really justify, I risk a very small position and keep a tight stop loss.

I will probably get stopped out of my FAZ position anytime now. But its not about making or losing money. Its about doing the right thing. I would be writing this post even if I made a profit on the trade.

I will be writing such posts about my mistakes and labeling them "mistake", so I can get back to them easily and hopefully learn from my mistakes. That's the whole point of keeping this trading journal. Hopefully, some of you readers too will benefit from my experiences. There are a lot of sites out there that give you stock picks and market advice but along with all that, I also plan to make this site about the dark side of trading- the mental side. Hopefully, we will all be able to grow as traders together.

Share your own similar experiences in the comments section if you feel like.

Good Luck trading!

P.S.: I just checked before posting this and I got stepped out of my FAZ position. Hopefully, a big lesson for a small price.