Trade Anatomy Portfolio
+2.80% MTD | +36.90% YTD
4 long | 1 buy | 1 sell
Last week saw the continuation of the markets higher, but more importantly saw a broader increase in participation from the trading screens, a key element which had been missing over the last several weeks. Likewise, setups are moving out of their pricing patterns and holding their gains relatively well, which is another encouraging sign. If the overall market chooses to take a step back and consolidate mildly near these levels, we'll keep our focus on our screens. As mentioned in previous updates, the movement in the lists will provide insight into the health of our overall trading environment. As for now, the environment is stable with pockets of opportunity.
On 11/02/15, AAOI was added to the portfolio at 21.15 with an initial stop at 18.27. By risking .50% of the portfolio value, we were able to establish a 3.67% position. However within a few days, AAOI made it clear that it wasn't going to move out of the most recent consolidation. Our initial stop was hit, and AAOI was removed on 11/05/15 at 17.85. Total effect on our portfolio was -.57%. Sometimes, stops can take weeks to be violated and other times can take only a few days, which was the case with AAOI. Either way, it is imperative to adhere to your stops and move on to your next opportunity.
The four stocks ( IPHI, LYTS, RTEC, & MXL) in the portfolio continue to trend higher from their initial breakouts. The week saw RTEC move out of consolidation for the first time since May of this year, but more importantly it continued building upon a well-formed weekly chart. The big winner for the week was MXL which blasted more than 25% on Wednesday. Up to that point, the MXL trade was only to the plus side by a few percentage points.
The watchlist did see some mild turn over, but did increase by a few names. Several stocks from the list have continued higher and as the market progresses, we will look for entry opportunities. Below are a few candidates from the watchlist which are worth watching.