ATHR revisited

If you see the post below 'To ruin a perfect day!' we said the following

Though the position hasn't been covered yet, any weakness will be used to cover this position. Chart is below. Please note that this indicates short term upswing and the rising wedge indicates downside. We will cover half the shorts on any weakness and then reinstate short positions later.

However notice another interpretation of the same below. Note the prices have moved below the rising trendline and below that the trendline is acting as a stiff resistance. Each time the proces move up, the trendline offers resistance and the stock retreats on hitting it. The price now is at the trendline and it will be interesting to watch the action below.

For now, we reverse our call of covering shorts on weakness. We will observe the action and any updates to our stance will be posted. So our current stance is - Hold you shorts and see the action.

To ruin a perfect day!

For today, let's look at how our bias can make us neglect obvious chart patterns.

When I got up in the morning, one of the stocks that I am long (Peninsula Land) has just done incredibly well. It was up 18.5% for the day. The chart attached below. It bounced from 2 key areas:

1. At the 15DMA support.
2. From the rising trendline marked in the chart.

So there was the ego booster of the day. A short while after that the US markets opened and the share I was short started moving up. Now look at the chart pattern and you will see that it has already created a rising trendline. Only after it broke the all time highs, did I actually notice this rising trendline. Though the position hasn't been covered yet, any weakness will be used to cover this position. Chart is below.

Please note that this indicates short term upswing and the rising wedge indicates downside. We will cover half the shorts on any weakness and then reinstate short positions later.

Why the BoyPlunger?

The question I get asked quite frequently is - Why do you call yourself the BoyPlunger?

To answer this question, we need to talk abt Jesse Livermore, one of the greatest traders on WallStreet. A book based on his life 'Reminiscences of a Stock Operator' remains one of my all time favorite books on trading. JL was called the BoyPlunger because he was supposed to have caused one of the market crashes (by shorting or 'plunging') and for his age at that time, he used to look very young.

For me, even though I am 28, I still have to present an ID whenever I need to buy smokes or liquor. That's sucks!I always try to keep a stubble on, but that just makes me look like a rogue student. So that explains the 'Boy' part.

I also like to trade on the short side. The reason for this is 2:
1. Greed takes a while to simmer while fear is instantaneous. In simple words, a stock takes a lot more time to move up then it takes to come down. So trading on short side, usually gives you profits, in a shorter timespan.
2. Among traders, going short is like an indication of the sophistication of the trader.

So there you have it - why the 'BoyPlunger'!

Short Covering and BuyIn

I was short this share and today I had to cover because of my broker. Here is the note that I got today:

Your account is short XXX shares of AMAG. We are no longer able to borrow all of the shares. You may need to buy back XXX shares to cover the short before 1:30 p.m. CST on 6/1/2007, or the security may be bought in for your account.

I covered a short while after that. And looking at the charts, I feel this is going down. I spoke to the account rep and he says that they don't have this stock in their inventory . Here is what I can make out from this:

A. This one is going down and they screwed me
B. Downside is limited as everybody has already sold.

Time will tell.

Your Star Signs Explained

The BoyPlunger Rules

History of the BoyPlunger:
We have been in business since September 2003. However our online venture is fairly recent. We started off with an investment in an IPO, which never really materialised as the IPO was oversubscribed. Our first investment was picked off the internet. Needless to say, we had entered at the top of the bull market. We were left as the proverbial bagholders in the May 2004 worldwide market chaos.

We then tried to diversify into other businesses, aka, network marketing. After some mediocore results in both the ventures, the group decided to focus primarily in the equity market. We had a profitable mid-2005 and early 2006. However we were hit by the Oct 2005 crash and May 2006 crash bringing down our net profits. Since then our results have been extra ordinary and included properly identifying the June 2006 bottom, Feb 2007 top and Mar 2007 bottom.

We branched into Option trading in Feb 2006 and have had good results in them.

We are currently operating in 2 main equity related instruments: Stocks(US and India) and Options(NSE India). Options, as a trading instrument, will be very selectively used due to their high risk, time dependent nature

What does the BoyPlunger want to achieve:

1. We will go short or long. All that matters is the trend.
2. Identifying the trend correctly is what we will focus on.
3. Once the trend is identified we will then go hunting for stock opprotunities.
4. We also plan on looking ahead. This is a very risky business but very profitable. We need to identify the headlines before they hits them

What do we provide:

1. The blog will be updated regularly with new ideas, current trends.
   
2. We will provide interesting and useful trading guidelines.
3. Charts and other new themes which could become the next bubbles. We will aim to be ahead of the curve.