MOJO Day Trading is quickly becoming a name on Wall Street for stellar stock picking and trading education. ProTrader Mike will show you exactly how to become a profitable stock trader even if you're an beginning trader. The blog contains valuable information for both day and swing trading styles. Main Website = www.mojodaytrading.com
There are one or two big breakout winners every day, but how do you number find them and how do you get into them as they are breaking out and before they make a big run up.
Well I will give you one of my secrets. I trade with Alerts & Triggers. For example on this DNDN trade below - I set my system to alert me when DNDN reached a Level 1 bid of 4.90 or greater. At that mark my system triggered a buy order of predetermined shares I set in the alert. I instantly was long. The reason I set the alert was DNDN tested 5.00 earlier in the week and sold off. I knew it would retest that and go thru. Just a matter of when. So instead of watching it all day - I watch over 20 stock setups - so it's impossible to watch all 20 I set up an Alert & Trigger - I then averaged up on DNDN after it broke 4.95 and bought more at 4.98 - selling at 5.10 - DNDN followed thru to 5.50
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By Cecile Vannucci and Liz Capo McCormick - Sep 14, 2012 12:22 PM ET
Investors are boosting options and futures wagers based on U.S. equity-market volatility to a record to protect gains after the Standard & Poor’s 500 Index jumped to an almost five-year high.
The number of futures on the Chicago Board Options Exchange Volatility Index, or VIX, has more than tripled to 411,407 this year, according to data compiled by Bloomberg. Outstanding options on the gauge, which tracks the cost of insuring against S&P 500 losses, has more than doubled to 7.48 million in 2012. The level is close to the peak reached last month.
“It’s a newer strategy, people aren’t as familiar with it,” Paul Britton, chief executive officer of New York-based Capstone Investment Advisors LLC, which manages about $1.7 billion and focuses on volatility trading, said in a phone interview. Photographer: Jin Lee/Bloomberg
Investors are turning to securities based on volatility to hedge against losses after the S&P 500 surged 16 percent this year, putting it on track for the biggest annual gain since 2009. Funds that bet on market swings attracted almost as much cash in the first six months of this year as in all of 2011, data from Hedge Fund Research Inc. show.
“Volatility has become more attractive now as an asset class,” Nikolaos Panigirtzoglou, JPMorgan Chase & Co.’s European head of global asset allocation said in a Sept. 12 phone interview from London. JPMorgan has $2.3 trillion in total assets. “When you have a crisis, volatility spikes. So buying volatility provides a generic crisis hedge. VIX (VIX) futures and options open interest has increased sharply as hedge funds have become more heavy users.”
Volatility Trading
Investors are using options to buffer against losses in other assets. In the strategy, known as volatility trading, fund managers buy the contracts to improve the odds that the value of their fund will be preserved during a market rout. When the S&P 500 plunged 38 percent in 2008, the VIX soared 78 percent.
About $874 million was added to volatility funds in the first half of the year, according to data compiled by Chicago- based HFR. That compares with inflows of $914 million for all of last year and withdrawals in 2010 and 2009. Investors poured $1.35 billion into the investments in 2007, the highest since the start of the data in 1990.
“It’s what I call a bull market in fear,” Christopher Cole, founder of volatility investment-management firm Artemis Capital Management LLC in Santa Monica, California, said in a phone interview. “There’s a tremendous amount of shock risk between deflationary events and the unintended consequences of the actions of global central banks and policy makers. As long as these issues remain unresolved, investors will continue to bid up volatility.”
Fed Stimulus
The U.S. Federal Reserve said yesterday it would buy mortgage-backed securities, adding to the $2.3 trillion of stimulus that the central bank committed to spur growth in the world’s largest economy. The HFRX RV Volatility Index, which tracks 40 funds that bet on stock swings, climbed 4.8 percent this year through the end of July. The broader HFRX Global Hedge Fund is up 2.7 percent in 2012. Volatility is a small part of the fund industry, with inflows this year accounting for 4.3 percent of the $20.4 billion added to hedge funds during the first half of this year, HFR data show. “It’s a newer strategy, people aren’t as familiar with it,” Paul Britton, chief executive officer of New York-based Capstone Investment Advisors LLC, which manages about $1.7 billion and focuses on volatility trading, said in a phone interview. “If we can educate people on the matter, then we have a chance to make them comfortable with the asset class, and where it would fit in with their overall portfolio.” Volume Drop U.S. options trading is poised for the biggest annual drop since 1988. The number of contracts changing hands fell 13 percent to 2.70 billion during the first eight months of 2012, according to data compiled by Chicago-based Options Clearing Corp. Should the pace continue, that would mark the second- biggest drop since OCC data began in 1973. The VIX slid 11 percent to 14.05 yesterday, the lowest level since Aug. 20. That’s 31 percent below its historical average of 20.50 since 1990. It rose 2.4 percent to 14.38 at 12:20 p.m. in New York today. The European counterpart, the VStoxx Index, a measure of Euro Stoxx 50 Index option prices, lost 10 percent to 21.11. The number of shares outstanding for exchange-traded funds that profit from volatility gains in U.S. stocks has also increased. Shares of the Barclays Plc’s iPath S&P 500 VIX Short- Term Futures ETN, the biggest of the securities, jumped almost nine-fold this year and touched a record 192 million on Sept. 7, data compiled by Bloomberg show. “People are fundamentally worried about uncertainty,” Kathryn Kaminski, chief investment officer at Alpha K Capital, a fund of hedge funds, said in a phone interview. “More pension funds are starting to wake up to the tune of either selling vol or getting involved in vol, which means that this space has a lot more growth potential for the next few years.”
Wondering why Protrader Mike is #1 on StockTwits.
SOMX – picked at .28 cents sold next day in AH at .62
REED - picked at 4.05 traded to 6 in a week
SWHC – picked day before earnings at 9.14 sold 10.72 in AH and 11.00 next day
VXX – picked 2 days ago at 9.25 traded to 10.00
EGHT – picked up today at 6.11 sold 6.34
CTIC – picked up this morning at 3.00 sold 3.24 went to 3.55
And so many more….
Two weeks ago, I set up a group on Skype – just a few people that follow my trades. I got to know little about each by speaking to them on the phone. After that they joined me on Skype which I am on during market hours. I started a Trading Group. I give them the buy entries with share amounts to buy, stop losses that are in effect and profit targets which can be raised or lowered depending on how that stock is acting in the level 2. I tell them how to sell to on the offer in pieces when it runs and how to be strong and buy when it sells off. Most importantly are the losses which I control and try not to let you get caught in a bad trade. Bankroll management is very important and there are many rules in place with me.
The goal is to make (depending on the size of your account) $500 to $1000 everyday.
The best part for these guys is they get to actually see my computer screen and me live trading during the day. The actually see it happening as I am chatting about it. Once in the stock, we all cheer it on and it’s fun because I hit many winners. I cut the losers and try for my singles and doubles. No homeruns for me. Occasionally I do hold one or two for swing trades as I continue to build position in the stock, but for the most part 95% time I am flat at the end of the day. I did hold a few thousand PPHM at 4.45 when it closed up on 25MM shares. Sold I next morning up .40 cents.
If you are interested in joining my chat group just send me an email to richlender@gmail.com and I will give you details on how to trade with me.
$ALXA - this one could be the one Tuesday - it's on the top of my radar looking to buy at 4.85, 4.89, 4.94, 4.98 - start selling 5.10 to 5.50 - next day goes to 6.00
Knight Capital Group Inc. Stock Downgraded (KCG)at TheStreet(Wed 5:00AM EDT)
NEW YORK (TheStreet) -- Knight Capital Group (NYSE:KCG) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, poor profit margins, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.
The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Capital Markets industry. The net income has significantly decreased by 81.3% when compared to the same quarter one year ago, falling from $17.57 million to $3.29 million.
The gross profit margin for KNIGHT CAPITAL GROUP INC is currently extremely low, coming in at 8.20%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.20% significantly trails the industry average. Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 77.68%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 78.94% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
KNIGHT CAPITAL GROUP INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, KNIGHT CAPITAL GROUP INC increased its bottom line by earning $1.24 versus $0.98 in the prior year. For the next year, the market is expecting a contraction of 161.3% in earnings (-$0.76 versus $1.24).
The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Capital Markets industry and the overall market, KNIGHT CAPITAL GROUP INC's return on equity is below that of both the industry average and the S&P 500.
Knight Capital Group, Inc., a financial services company, provides access to the capital markets across multiple asset classes to buy-and sell-side firms and corporations, as well as offers capital markets services to corporate issuers and private companies primarily in the United States. The company has a P/E ratio of 2.5, equal to the average financial services industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Knight Capital Group has a market cap of $273.9 million and is part of the financial sector and financial services industry. Shares are down 76.5% year to date as of the close of trading on Tuesday.
$KCG today went to 2.70 - 2.71 - I was thinking wow not much volume and the stock is so cheap. I told some peeps to buy some. They are so many eyeballs (big institutional) watching this stock. Knight Capital Group has traded like a falling daytrade. I'll explain - when long a stock and it's flying high things are great, then all sudden it reverses and starts to go down. Like RGEN yesterday traded up to 6.37 and reversed - This happens everytime - it goes down and when approaches the 6.22 mark will break down further to the teens then cracks 6.10 - and all the shorters stack up and buy at 6.09, 6.08, 6.07 - (smart money buys on way down, and sells on way up) then it firms up and goes back to 6.12. Two minutes later retests the 6.07 and breaks toward 6.05, 6.04 - once it hits there the fast selling comes in and you can see the huge size on the bid at 6.00 - at this mark it gets very fast and takes out all the 6.00 and then does the same thing - all the shorters cover 5.99, 5.98 5.97 - it touches back to 6.00 then gets walloped to 5.90 and takes that out then to 5.80 and takes that out then to 5.75 range where it starts to consolidate from overselling. Over next day or so it drops further to 5.70 to 5.60 to 5.50 5.40 - this is where I bought today at 5.43 and sold later in the day at 5.60 (made .17 cent daytrade profit) - Now it will whipsaw around but my point is at these even numbered marks stocks always react this way and its no different for KCG. The stock went from 4 to 3.50 to 3.00 - the smart money covered 2.99,2.98.297 - it bounced back over 3.00 and then dropped to retest the 2.97 and went to 2.90 then 2.80 then 2.70 - this was the bottom 2.70 as today it ran from 2.73 to 2.84 on huge volume very fast. The day this trades 100MM shares and it will again it will go up 1.00 in one day. That puts it at 4.00 and the next day 1.00 more ot $5.00 - may even go three days to 5.50 $6.00 range, IMO of course.
My previous post
Here is what going on with KCG IMO - Stock plummetts - everyone stuck with huge margin calls - they can delay and strectch it a month and have to either sell it or come up with $$$$$. Usually its sold at lowest levels - The big players do this on purpose to hold it down and collect all this cheap stock then in a week or two after the month is and your stock is gone it runs right back up close to where it plummetted. Your like WTF - I just lost all my money and a month later after I sold it's right back. A prime example is ES - look at the chart on this and the chart on KCG and the timelines.
KCG BUY TARGET = 2.75 to 2.85 - stop loss 2.40
KCG SELL TARGET = $5.50 to $6.00
Stock Quotes in this Article: CGR, HTZ, KCG, TGB, UBNT
By Roberto Pedone
Senior Contributor
08/24/12 - 12:31 PM EDT
WINDERMERE, Fla. (Stockpickr) -- Trading stocks that trigger major breakouts can lead to massive profits. Once a stock trends to a new high, or takes out a prior overhead resistance point, then it’s free to find new buyers and momentum players that can ultimately push the stock significantly higher.
One recent example of a successful breakout trade that I flagged was biotechnology and drugs player Rosetta Genomics (ROSG). In “5 Stocks Under $10 Set to Soar” on Aug. 9, I mentioned that ROSG was nearing some major previous support levels at $4 to $3.75 a share, and that the stock was extremely oversold. I said that ROSG was poised for a monster bounce if the stock held those levels, and if big upside volume started to flow into the name.
Now, technically, I didn’t mention any breakout levels in that article, since none had developed at that time with the stock trending near those previous support levels. That said, I did tweet out continued commentary on ROSG as the trade setup, and then the stock went on to trigger a major breakout.
Shares of ROSG exploded higher on Wednesday by around 40% as it triggered a major breakout trade above a number of key overhead resistance levels at $4.85 to $5.23 a share with massive volume. As I write this piece, ROSG is up another 7% today as the stock continues to advance above its 200-day moving average of $6.10 a share. If this uptrend continues for ROSG, then this stock will setup to trigger another breakout trade above its 50-day moving average of $8.65 a share.
Knight Capital Group
A stock in the investment services complex that’s trending within range of triggering a near-term breakout trade is Knight Capital Group (KCG), a global financial services firm that provides access to the capital markets across multiple asset classes to a network of clients, including buy- and sell-side firms and corporations. This stock has been hammered by the bears so far in 2012, with shares down by over 75%.
If you look at the chart for Knight Capital Group, you’ll notice that this stock plunged and gapped down huge earlier this month from around $10.50 to its recent low of $2.27 a share with massive volume. That crash has pushed KCG into extremely oversold territory, since its current relative strength index (RSI) reading is now 20.88. Following that crash, shares of KCG have now started to uptrend a bit with the stock making lower highs from $2.27 to $2.75 a share. If that pattern can hold, then KCG has a chance of triggering a near-term breakout trade.
Taseko Mines
One stock that looks poised to trigger a major breakout soon is Taseko Mines (TGB), which is focused on the production of copper and molybdenum from the Gibraltar mine and on permitting the New Prosperity gold and copper project. This stock has been beaten down by the sellers during the last six months, with shares off by over 30%.
If you take a look at the chart for Taseko Mines, you’ll notice that this stock has formed a major bottoming chart pattern over the last three months, with shares finding buying interest whenever its traded down to $2.45 to $2.46 a share. Following that double bottom chart pattern, shares of TBG have started to uptrend back above its 50-day moving average of $2.65 a share with decent volume. That move has now pushed TGB within range of triggering a near-term breakout trade.
Claude Resources
Another stock that looks ready to trigger a powerful breakout trade is Claude Resources (CGR), which is engaged in the acquisition, exploration, and development of precious metal properties and the production and marketing of minerals. Claude's mineral properties are located in northern Saskatchewan and northwestern Ontario. This stock has been crushed by the sellers so far this year, with shares off by over 45%.
If you take a look at the chart for Claude Resources, you’ll see that this stock has been trading range bound for the past four months, between 56 cents to 57 cents on the downside and 76 cents on the upside. That chart pattern has so far marked a triple bottom for CGR off of 56 cents per share. Now CGR is starting to recapture its 50-day moving average of 64 cents per share with decent volume. That move is quickly pushing CGR within range of triggering a major breakout trade.
Market players should now look for long-biased traders in CGR if this stock can manage to trigger a breakout trade above some near-term overhead resistance levels at 73 cents to 76 cents per share with high volume. Look for a sustained move or close above those levels with volume that registers near or above its three-month average action of 296,069 shares. If that breakout triggers soon, then CGR could explode to the upside and possibly hit its next major overhead resistance levels at 90 cents to $1.20 a share.
One can look to buy CGR off any weakness and anticipate that breakout, and simply use a stop that sits near its 50-day moving average of 64 cents per share. Or you could just buy off strength once CGR clears 73 cents to 76 cents per share with high volume, and then simply use a stop somewhere around 67 cents per share. I would add to either position once CGR closes above 76 cents per share with heavy volume.
Triangle Petroleum TPLM - This one buy here 6.75 and target is 8.35 to 8.75
Kodiak Oil & gas - KOG This one buy here 9.30 and target is 11.00 to 11.50
Is PDL BioPharma the Perfect Penny Stock?
By Rich Duprey
Low-priced stocks are often low-priced for a reason: They have significant problems to overcome. Yet for those that have fixed their problems, they may be ready to take off to the next level.
At Motley Fool CAPS, a "penny stock" is any stock trading under $10, and you'll find some of the best CAPS All-Stars regularly seeking out winning single-digit investments. We identify them with a penny icon and by pairing up their opinions with some top companies trading for pennies on the dollar, relatively speaking, we may end up with more than just chump change.
Of course, just because a stock is low priced, isn't necessarily enough to suggest it will have an easier time recording big gains. Low-priced stocks are often low-priced for a reason. But this week we look at drug developer PDL BioPharma (Nasdaq: PDLI ) , which has seen its shares rise 35% over the past year, yet trades just over $7 a share and is garnering top honors at CAPS.
PDL BioPharma snapshot
Market Cap $993 million
Revenue, TTM $356 million
Return on Investment (5-year) 37.5%
Dividend/Yield $0.60/9.2%
Recent Price $7.07
CAPS Rating (out of 5) ****
Growth is growth
It's easy to see why investors have bid up shares of PDL BioPharma over the past year. With a passel of drugs on the market, the drugmaker is receiving royalties on global sales of drugs from some of the biggest names in the pharmaceutical industry, including Roche, Novartis (NYSE: NVS ) , Elan (NYSE: ELN ) , and Biogen Idec (Nasdaq: BIIB ) .
All of PDL's revenues in the second quarter came from royalties, and they were 3% higher than in the year-ago period. Macular degeneration treatment Lucentis enjoyed a 15% increase in sales for Novartis, multiple sclerosis drug Tysabri was up 13% for Elan and Biogen, and cancer therapy Herceptin saw sales rise 4% for Roche. Its other cancer treatment Avastin was stung after the FDA yanked approval for the breast cancer therapy and sales fell 1% in the quarter.
While it had to start paying back some royalties for international sales of Lucentis due to a settlement with Novartis, PDL inked a new deal with Roche for sales of metastatic breast cancer treatment Perjeta that analysts estimate could be worth as much as $1 billion. According to Roche, adding Perjeta to Herceptin and chemotherapy is the only regimen to have shown a significant improvement in survival rates without the cancer progressing compared to just Herceptin and chemo alone. PDL will begin receiving royalties for Perjeta this quarter.
Penny for your thoughts Considering the growth in its drug portfolio on the market and the potentially much higher sales it can realize from new agreements, I'm surprised PDL BioPharma trades at what seems to be a big discount. The stock goes for just five times earnings and only for times estimates, and when you factor in how much analysts are expecting earnings to grow the pharmaceutical is trading at a fraction of that growth rate. Moreover, its enterprise value goes off at just five times the amount of free cash flow it generates, which is exceptionally cheap.
The risk here is that a certain patent tied to Avastin, Herceptin, Lucentis, Xolair, and Tysabri expired in Europe in 2009 and only through "supplementary protection certificates" issued by various countries has it continued to enjoy exclusivity. Those SPCs expire in 2014 while other patents will expire next year.
Make some change CAPS member SamsaricSufferer believes PDL's pipeline of drug candidates should carry it through, and I believe the market has more than compensated for the risks associated with patent expiry. I've already rated it to outperform the broad market averages on CAPS, finding it a better bet these days than Bristol-Myers Squibb (NYSE: BMY ) , which is finding generic competition much sooner than PDL, and recently had a setback in its important hepatitis C portfolio. But you can tell me in the comments box below whether you think PDL BioPharma is a pharmaceutical penny stock that makes perfect "cents" for your portfolio.
With a dividend yielding 8.5%, PDL also offers investors an attractive payment as compensation for the risk it entails. However, The Motley Fool has found nine solid investment plays that won't cause you to lose sleep. Get your copy of this free report "Secure Your Future With 9 Rock-Solid Dividend Stocks" by clicking the link and downloading it today. Did I mention it's free?
