From the Trading Desk

Past Big Winner 2012: HEES September 4, 2012

HEES was a beautiful setup that offered incredible add point signals that just got caught up in a QE tape that simply does not move like it used to pre-QE. Overall, HEES was an incredible long position and it behaved exactly how a leading stock should act after we get a strong long signal. The first long signal was a beauty and left no doubt that we wanted to be long HEES. Sadly, our trading performance that year was poor by our high standards and this prevented a larger position from being initiated. Thankfully, it gave multiple long signals allowing for a larger than normal position. Once again, sadly, the QE market was not a trend following friendly market and we were shaken out of a decent sized position only to then receive one final add signal that we added to. It wasn’t the greatest trade based on the fact that a signal like that should have had us at least 10% long this one stock for at least the early part of the move. However, it was a great trade still and something we can learn a lot from. From 9/4/12 to the top on 9/19/14, HEES was able to produce a 250% gain. In the pre-QE tape that probably would have been much higher. It is what it is. If we see this pattern again in a high quality stock such as HEES was at the time we will invest accordingly. We are waiting patiently for our next FLT, LQDT, and/or HEES pattern.

The initial long signal:

hees2

hees1

A great add signal:

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hees3

An add signal that should have worked but did not–blame QE!:

hees5

A great add signal on the day the stock market produced a powerful FTD:

hees6

The possible topping signal:

hees7

The failure:

hees8

Video Lesson:

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