Sunday, January 4, 2009

Looking for Exits

I began looking for exit strategies on my two holdings in my money management portfolio this weekend. I've included charts on the stochastics, price resistance, and another on Bongo which is a somewhat obscure indicator that I use. The Bongo signal is used for signaling an upward or downward bias for stocks. The signal is determined by the value relationships of 3 different Wilder RSI's and a moving average.

For my DO holding I see resistance at about 70 dollars. The dashed red line above %K on the stochastics shows my projected rise, and the Bongo is green on the daily. I will sell when I see a move down in %K or when Bongo goes red or when resistance is met. I still plan on holding out for a little more, but I must not get greedy as there are so many stocks that I need to analyze that show the start of a ride that I don't want to miss out on.

I think I will dump MO on Monday during the first 30 minutes of market open if I can get a slight rise in price. I believe it is about done as indicated by resistance and an impending downturn in %K. DO still has room to run, and if it breaks through the first level of resistance at 70, the next level of resistance is about 76, but like I said I don't want to get greedy.

Greed can blind you and cause heartache in the trading process. Just wanted to keep you up to date on what is going on inside my head, as promised, in my money management attempt. Once I get clear of MO, I let you know what I am eyeing next and the reasoning.













Have a good one,
Roger

4 comments:

  1. Roger,
    love your comments on what you are doing and why - thank you. What charting sw do you use? What are your opinions about the market and are you going to go back in with MO proceeds?
    Jennifer Clark

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  2. I have been using a covered call strategy to set the exit point and even the exit date. I may miss some profit but the option premium offers downside risk. If the option is not exercised, then I can choose to write another call or sell the stock if I am in the money.

    I don't have a lot of trading capital, so I can't afford to settle for a 25 cent per share gain on one or two lot positions -- the round trip commissions would eat all that up.

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  3. good calls on both MO and DO (at least as of Tuesday 1-6-09) MO is tanking after the Monday run up and DO had a great run on Monday and gapped up on Tuesday - always a good sign.

    "Bongo" sounds interesting. I am very familiar with Wilder's % indicator...will have to look into Bongo.

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  4. @Jennifer
    I use many charting softwares, but I find myself using Amibroker and StockShare2 more than anything else. I personally don't plan on getting back into MO, but I will definitely always be reinvesting in something. The market right now seems somewhat hanging in a state of "don't know where to go next" if you know what I mean. There seems to be some resistance in the DJI at 9000, but once that is broken I think it will be returning to a stronger state.

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