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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.
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:
- At the 15DMA support.
- 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.
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'!
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.
