Weekend Review | Energy Metals Material

Trade Anatomy Portfolio

+3.56% MTD | +8.21% YTD

Position Summary

11 long | 1 buy | 1 sell

Watchlist Summary

20 candidates


Continued strength in energy, metals, and materials remained the constant theme for April. Now as May begins, many will be watching to see if the trends can continue or if a brief pause is in order. From a portfolio perspective, the metals/metal related stocks had the largest impact on the portfolio for the month, accounting for roughly 2/3rds of the gains.  On April 7th, IAU and GDX were added to the portfolio.  IAU was added as a 10% position and GDX was added as a 5% position.  On April 12th, SLV and PPLT were also added to the portfolio as 5% positions each.  In total 25% of the portfolio is long metal related investments. Below are charts with their trailing stops.

Other Positions

EBIX, OLLI, OLED, and RUBI pushed higher this month, helping the portfolio to the plus side.   A few stocks, CHEF, MXL, and BSFT, couldn't get moving and were taken off the table. BSFT was the most recent removal which occurred Friday.  BSFT was initiated on 4/1/16 at 40.54 with an initial stop at 37.45, risking a .50% of the portfolio value.  6.56% of the portfolio was allocated towards the trade.

BSFT was removed from the portfolio on Friday at 37.86 for a loss and a -.43% effect on the total portfolio return.  In early trading, intense selling pushed BSFT below the initial stop by an extreme amount.  This type of downward move is generally associated with a negative earnings announcement.  However, BSFT doesn't report earnings until Monday.  When a situation like this occurs, you can either liquidate immediately or wait for a possible recovering off the lows.  Since a clear catalyst wasn't present and the other positions were keeping the portfolio in balance, a wait and see approach was taken.  

Once the stock began to recover off its lows of the day the decision was made to take the loss near the trailing stop. Surprisingly, BSFT went on to recover most of the down move by the close of trading.  In hindsight, waiting til the end of the day to make a decision on BSFT would have been better, but trading is an imperfect occupation with imperfect results.  The total loss was kept within our risk tolerance which is key to maintain capital value.  BSFT's earnings will be reported next week and if it acts as a catalyst to push the stock higher, a re-entry could take place.  Remember a trade is never personal. Below is the chart.

Watchlist Summary


There was some weakness in the watchlist to end the month.  The main screens also decreased by a small amount but not enough to set off the alarm bells. Had the lists gone from 165 to say 110, then I might be checking for the nearest exit.  

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