From the Trading Desk

XCO 5-30-08 to 7-1-08

Event though I knew oil was topping (review my comments in the market commentaries when oil topped) soon, I know that some of the best big winners are the late stocks that make big surges. XCO bounced right off the 50 DMA, had strong fundamentals, and as you can see was preceded by a ton of accumulation and strong green to max green BOP along the way. Right before the bounce off the 50 DMA you will notice volume contracted. This is what made this a clear easy stock to go heavily long. Sadly, like I have been saying, the VIX is too low to give that 200-300% pop that used to come from patterns like this (those returns will return after the bear is done) but I still knew we could possibly have some big gains (remember returns in 2008 are nothing like they were in 2003) out of this Featured quality long. If you went long, which most platinum members did, you received a nice 52% gain in only one month. I know it was short and that the stock gave few signs of topping but still it was nice to get some normal return in a market that has rewarded nothing. Your only key that it would be topping (but no one could no it was going to be the ultimate top) was by looking at a weekly arithmetic chart. There you can see the stock raced up the chart quite fast compared to past rallies and that was your clear sell signal. Especially with this happening in a bear market. I know it isn’t easy to learn when to sell but AFTER TIME AND HARD WORK you figure it out.

the buy:

xco5_30_08__Large_.PNG

the top:

xco7_2_08__Large_.PNG

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Comments

  1. Bruce Russell says:

    Aloha Joshua…How r u doing mate… been a while since we talked…you were not feeling very well when we first communicated so I am glad to see that ur still doing your business. do u ever hang out in any clubs in TCNet during the day?… drop me a line or private message me thru TCNet…my handle is “mergewithgod”….you can find me thru these clubs …EZMoney, Fibozachi,or makemoney.. i think they are all clubs that do not need a password to join… Looks like we escaped this serious tsunami threat this time without a scratch.. phew!.. aloha for now my freind, Bruce Russell

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