The market has been chop since the end of September. The big bounces fail, and the breakouts go nowhere.
I’m going LIVE TODAY at 10:30 am with Tim Bohen.
In a market like that most of my setups just don’t work. The ones that do are the few names that keep going up while everything else goes sideways.
But the mistake I made this month was trying to trade everything anyway.
It gave me my most frustrating week in months, and my biggest winner had its best day while I was busy losing money in 7 other stocks.
Luckily, this isn’t my first bad week. I know how to bounce back.
I’ll show you how it played out on two of the stocks, which one I think is worth adding to, and which one to drop.
Here’s what happened…
Three weeks ago I sold my position in Hewlett Packard Enterprise Co (NYSE: HPE)
It was the second breakout on HPE that had failed on me in 2 weeks.
A failed breakout to me is a specific thing. I wanted the stock to gap up and push. Instead it traded back under the previous day’s low.
When that happens I’m out, and I wait for a breakout that holds before I try the name again.
Moderna, Inc. (NASDAQ: MRNA) had been doing the opposite of HPE. I bought it in September. Every pullback held.
So I added and moved my risk up under the new low. Then I sold pieces into the move. By September 28 it was my biggest winner of the month.
I don’t need to catch every setup. I do better when I size up on the setups I’m good at and drop the ones I’m not, as long as the stock has enough liquidity for the size.
The reason is speed. MRNA moves a few percent a day, so when it goes against me I have time to cut the loss small.
HPE in those 2 weeks was choppy. A breakout would go and fail the same day or the next. I’d be selling it back before it had done anything. Dell did the same thing to me in the same stretch.
Then I spent the next 2 weeks doing the opposite.
Between October 5 and October 9 I had positions in ImmunityBio, AMC, Ouster, Corning, Intel, Palantir and Netlist.
I got stopped out of AMC at the low of a dip that reversed. I sold ImmunityBio out of frustration the day before it ran.
Ouster and Corning gapped down on me. Intel went from up about $10.00 a share to back at my entry. I sold Palantir to buy more Netlist, and Netlist failed.
While I was dealing with all of that, MRNA closed up 14.21% at $225.00 on October 9. It was the biggest up day it had all year. I knew it was a buy over $200.00 and I wasn’t in it.
Then HPE ran 18% without me and I bought it again. On October 9 it was the one trade on my list that was working, and my plan was to hold as long as the trend stayed intact.
It closed at $73.46 on October 9. Then it closed lower on each of the next 4 sessions and finished at $58.63 on October 15. From October 9 it lost 20%. It ended the week below where I had sold it in September.
MRNA closed at $194.82 on September 24 and $236.50 on October 15, up 21%. Over the 4 sessions HPE lost 20%, MRNA gained 5%.
I had 7 names going against me in the chop and small size in the one that was paying.
I’m not buying MRNA at the high. My objective on it is $250.00. I don’t chase an extended open. HPE is off my list until it has a breakout that holds.
The names I’m sizing up this week are the ones that have been paying me.
For the best setups in this market, join me and Tim Bohen LIVE TODAY.
Stay sharp,
Jack Kellogg
*Past performance does not indicate future results
