Trade Anatomy Portfolio
+2.62% MTD | +2.30% YTD
3 long | 1 buy | 1 sell
It's fair to say that after four weeks, most traders remain skeptical of the market's recent advance. You can't really blame them, it's easy to feel as though the current environment is not as it should be and has possibly reached the top of the roller coaster again. It's OK to be a skeptic, but make sure you validate those feelings against your trading process. If your setups are appearing time and time again, and you're choosing not to take any trades, then it might be time to change your view. At present, the type of setup that I prefer to trade is still only producing a marginal amount of opportunities.
With another impressive week, the S&P 500 inched closer to changing its trend, but still remains negative on the weekly chart.
This week, one new position was taken, and another one was removed for a small profit. On February 17th, GLD was added at 115.32 risking 1% of capital which allowed for a position size of 21.92%. On March 11th, GLD was removed at 119.98. The trade added .98% to the bottom line. FN was added to the portfolio at 27.78 with an initial stop loss of 25.82. By risking .50%, the total position is 7.09% of portfolio capital.
I want to discuss the FN trade in a little more detail, because it offers a good example of a stock trade that wasn't initiated on a breakout, but instead was initiated after a pull back. In early February, FN made a strong gap up on an earning's report. When that occurred, the overall trading environment was extremely negative, so instead of taking the trade, FN was placed on the watchlist as a potential candidate. After the initial move higher, FN started consolidating and began to trend down slightly towards its trailing stop, the blue line. On Tuesday, it bounced off the trailing stop, indicating that the 26 area could act as future price support. With further price expansion on Friday, FN offered a good risk to reward opportunity, which is why the trade was initiated .
From a weekly perspective, a break above 30 would offer another entry opportunity and continue the trend higher.
Most setups have continued to develop, but aren't quite ready to be added to the portfolio. The total screen list is now sitting at 122 which is extremely low considering the most recent price moves in the indexes. Below are a few to watch.