Right now, I have a gain of just over +8.00%, with my long position at $9.19. I am applying my trading strategy "Y-Swing" (which is posted in my blog). I have set a trailing stop order of approximately -7.00%, of $0.67, activated at $10.00, so right now my stop is set at $9.34, going up every time the price moves higher than $10.00. This guarantees me a return of just +1.00%, if MGM pullsback from here. However, I am guaranteed to leave with a gain even if it's very small, if the price continues to move higher I will have the potential for higher gains. One thing that is important, is that when you have gains to try to hold on as long as possible, but when you have losses to get rid of them quickly. Even if my price target is set at $10.50, this doesn't mean it won't move higher, this just means that it's what I consider it to be its fair value. Often, like it was the case with AIG last week, you will see a positive feedback, which means an amplified move, which is then followed by a negative feedback when the price reverses back to its mean and approximate fair value. If I attain a gain of +20.00%, I will sell the portion of shares representing that gain, so that I can start cashing in some gains. Then I would set a new trailing stop order based on my last sell point, and I repeat the process as long as I can. A possible scenario for tomorrow, where I would then suspect MGM to have topped, is if MGM hits tomorrow a higher high while closing lower than today. Seeing the next day another down gap hitting lower lows and lower highs would confirm the top. For now, as long as this trend up continues, that I see no sign of a reversal and that my stop loss orders don't get triggered, I'm holding on. Another very possible scenario, which I saw happen back in April-May, (where I made 100% gain), after a similar move, MGM had a breakout just after 2 days after a previous breakout occurred, which would be the equivalent of seeing this happen tomorrow. This is called a breakaway trend. But there is no way to predict this, but I think if MGM can close near the highs today this may be a very possible scenario, where MGM could jump as high as maybe $12.00. But this is pure speculation, and no chart will ever be able to predict this. However whenever you see a breakout to the upside, it is a signal to buy.
Long MGM @ 9.19 - TSO: $0.67 set at $10.00
No comments:
Post a Comment