Healthcare, Dollar and More

The US dollar continues to rise as expected and biotech is still incredibly hot. No it is blazing hot. ZIOP from my biotech stocks list in late January is almost a double already. IBB just broke out again and it looks like more highs in a lot of these stocks is in store. I just added some to my trading watchlist for Friday the 6th. On another note my long-term positions haven't changed much. From top to bottom in percentage I'm long FSEAX Asian Emerging Markets Fund as my largest holding, second largest is PFN Pimco Income Strategy Bonds, third is UUP US Dollar Long ETF, Fourth is USL Oil ETF 12mo, fifth is PKD Parker Drilling, and last is KEG Key Energy Services. EDIT Also long LOJN LoJack and silver. Recently I added some more to the UUP long dollar position. I'm very underweight in the two oil stocks. I like all these holdings for the long-term. I may not hold them all for years though. I'm not totally happy. I really need some more diversified US exposure. I might go with a Nasdaq index ETF and Russell 2000 index ETF here soon.

The trading watchlist for Friday the 6th is LAS AXN CYTX ABTL TTI CYTK ATXH. The only short bias is ABTL. My favorite on this list is LAS. If it starts moving it very well could hit 1.50 in a couple weeks based on how it has moved in the past. With the size of the volume here on LAS I see it moving. Back in 2009 or 2010 I remember it had day after day runs of 10-30%. AXN is only good if it breaks over 1.14. If it doesn't it looks dead. All of these are speculative day trade watches.

Loss on EXEL Trade

Friday I had EXEL along with a bunch of other stocks on my watchlist. EXEL was a bull flag continuation breakout setup. 2.99 was the high of the previous run day and was the resistance level I was looking for a break of to get long. It came and printed 3.00 on decent volume. So I got long and filled at 3.00. EXEL immediately failed to hold that 3.00 and fell off the highs and slowly declined. I'm thinking it is just consolidating and the uptrend over 3.00 will start any time soon. The market makers were pretty crafty on EXEL Friday and the 3.00 was the failed breakout. I finally realized I am probably wrong on the breakout today and cut my loss at 2.88. I actually put the order in trying to get 2.91 but with the market order I got a lesser fill. When a stock is moving fast I will always use a market order especially on the entry. I would rather catch a big run with a less than favorable fill than miss the whole damn thing with a limit order. It was not a superior setup to take from the beginning because based on its past runs 3.15 - 3.20 would be the most it would go anytime soon. The risk reward wasn't really there. I also waited a bit to long to cut the loss after the 3.00 didn't hold. I think based on the setups risk reward the position was a bit oversized for me. This one is looking like a good short candidate since the 3.00 breakout failed. I put up a new post on the 27th about the direction of the USD.

Direction of the Dollar

The US Dollar has been on a serious bull run lately. No doubt macro forces via the FED's guidance on rate raising are behind it. Since late January the USD has been consolidating. I've been waiting to see what becomes of it. Well folks it has formed a beautiful symmetrical triangle consolidation. A very clear one. I can't remember the last time I've seen such a clean symmetrical triangle on an index or commodity. Maybe gold in 2009. I mean it's that clean and pretty! Below is a chart of gold I drew up in 2009.

Image above from this old article on gold.
The USD has now spiked up off the tip. The chart says Bullish with a capital B. I expect a breakout over the highs and more gains. Here is the chart of the dollar. I've been long the dollar with the ETF UUP.

Crude Oil Trade

Crude oil has been forming a trading range lately with support being particularly defined. With a steady decline right onto support I saw an opportunity to get long. Getting long right on support gave me a clear area for a mental stop loss. Not only that but the upside potential conservatively was the top of the trading range at resistance. I drew up the trading range below.

The stock I used was UCO the double long crude oil ETF. The chart of USO and CL are very similar. I bought UCO at 8.07 on the 24th of February and tweeted it on Twitter. The doji candlestick it printed on the 23rd pretty much confirmed my area of support. It just hung out and declined a little around support after I bought it. I was fine with that as all that mattered was the action off support.

The next day oil ramped up big and UCO hit an intraday high of 8.57. Along the way I sold about 3/4ths of the position at $8.28 locking in the gain. Expecting more run days I held the rest overnight. I set a sell stop loss at 8.15 and the next day stopped out of the rest of the shares at $8.15 for a slight gain. Scaling out the way I did in tranches selling 3/4ths of the position with the gain really made this trade work for me. I missed the top but caught a good gain which I'm happy with. This especially since my thesis of a run to resistance is proving wrong so far.

We'll have to see what happens with oil over the next 24-48 hours to get an idea of direction. It very well may continue higher or we could crash below support. If there is a gap down below support oil will definitely be testing the lows of the winter.

CRIS Short Daytrade

I was following CRIS with a short bias for the past couple days. It went from $1.20 to $3.00 in about a month. It had about eight straight days of positive gains with no red days heading into today. Yesterday it looked like the buying volume had finally exhausted itself. Without any consolidation these runaway stocks like CRIS usually end up crashing pretty hard and fast.

The breakdown finally came this morning. I posted this trade on my Twitter. Looking at the intraday chart below you can see that $3.50 became resistance three times. Dollar marks and $.50 marks are often important technical levels on stocks under $10 a share. The $3.50 was tested and never broken this morning. As soon as I saw the stock go red on the day (negative) and the support of $3.30 from yesterday taken out I wanted to get short quick. The big sell volume was great too. Ideally I was looking for a pullback to the $3.40s to short. That was incase the trade went against me and the $3.50s were taken out. So I had a mental stop loss of $3.51. It actually came back up for a bit but I filled at $3.31 short.

I was confident and happy with this as more downside was evident from the stuff I just mentioned. CRIS continued to plunge as you see on the chart. I covered at $3.19 taking $.12 a share in gains. I took the quick gain because these biotech stocks can be quirky when it comes to holding losses. Just when you think the run is over and the stock is doomed they run again and again. It went on to a low around $3.00 and made a wild recovery into the close. I still say short bias on this one but like I was saying bio's are tricky sometimes. I won't be scalping this particular stock again soon.