****Note: Too bad about K (selling ½ last Friday). But at least we still have the other ½ and small positions in JO, FSLR and now RSX. K had closed on the lows after huge gains in the overall market so defensive made sense. In the end, it’s the profits not the small losses that count most.
***NOTE: Lower sell stop JO: 18.44 stop. Also will look to add the other ½ over the 50 DMA
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Existing Position: K: Long ½ position 67.64 ATR: 1.27
Name of Instrument: Kellogg Co.
Current Price: 68.58
Sell Stop: 65.19
Reason For Trade: Those of you who are new to the service, I featured Kellogg as a top pick for a long. At the time, I told attendees that I wanted to see K clear the 50 DMA. So true, I bought ahead of that in anticipation that it could clear because the slope on the overhead 50 DMA is inclining. Using the law of attraction to major moving averages theory, that gives this a high probability that it will reach and hopefully breach the 50 DMA. On the weekly charts, I used the 65-week moving average to determine our risk. That also breaks the 200 DMA should this fail. With a 2 ATR of risk, we are giving the trade room to mature, however, I will move the stop up under the 100 DMA (now at 67.06) well ahead of our stop if K cannot get going. The all-time high in K is 72.34 made on October 22nd. It declined after reporting the 3rd quarter earnings results. If you are an active trader, if K can close over 70.00 the odds increase exponentially that it can make new highs with an overall target of close to $80.00
First Profit Target: We will have 2 ATRs if it gets to 70.00 and will go to a no loss stop then. At 3 ATRs or 71.24, we will take off 1/3
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****Existing Position: FSLR: Long ½ 53.09 ATR: 2.12
Name of Instrument: First Solar Inc
Current Price: 54.88
Sell Stop: 48.19
Reason For Trade: Those of you who have known me for a while know that I like the solar industry as a growth area over the longer term. First Solar reported robust 3rd quarter earnings. Technically, we waited to buy once it corrected to and held the 200 DMA. In an Accumulation Phase, the correction gave us the opportunity to buy against 3 major moving averages: the 50, 100 and 200 DMAs. Our stop is generous to allow for a smaller position size given current market volatility. Our stop is also under the 65 week moving average. If the market holds up, a close at the end of November over 56.20 is a breakout over the 23 month moving average. If the market fails again, we have lots of room to move up the stop and reduce the risk.
First Profit Target: 59.79 for 1/3-1/2 off with no loss stop when/if it trades close to 57.00
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***New Position: JO: Long 1/2 position 18.95 ATR .48
Name of Instrument: iPath Bloomberg Coffee ETF
Current Price: 19.26
****Lowered: 18.44
Reason For Trade: 3rd probe only this time ½ position with risk to under last swing low. I will look to add over a confirmed phase change to recovery. For now, the gap higher and close on the highs with good volume was reason enough to try a long again. Also, a story came out that ”the main threat to Colombian coffee output now, after the mass replanting program with rust-resistant trees, appeared to be rising wages, which now accounted for a bigger chunk of production costs than the historic 40%.”
First Profit Target: TBD for now
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***New Trade: RSX: Long 3/4 position 17.67 ATR: 42
Name of Instrument: Market Vectors Russia
Current Price: 17.57
Sell Stop: 16.49
Reason For Trade: Clearing the 200 DMA and in an Accumulation Phase, fundamentally Russian stock market is trading at the highest levels since 2008. Technically, our stop is under the 50 and 100 DMAs for room. There is a 65 week moving average at 18.22. If that clears it will be the first time since it did so briefly in July 2014. Biggest overhead resistance is at 20.20 the 23 month Moving average. If it catches a move over that level it is a good trade to hold even a tail into 2016.
First Profit Target: 19.17 for ¼ to 1/3 off
