Nice ‘lil Hammer on AGP
This one’s from a discussion in the preceeding post’s comments:
Amerigroup (NYSE: AGP) is a “Managed Healthcare Company” which serves people who “receive healthcare benefits through publicly sponsored programs”.
This stock has been taken out back, shot, stabbed, run over… then backed up and run over again. The little hammer from today (lower right corner) may give us a quick swing trade. Let’s watch.
LP said,
May 14, 2007 @ 10:55 pm
Nice… NotReallySure just made a nice 400% return on his puts…but he closed his trade on Thursday as it was one of the few stocks that closed positive…I like the long call here…
Fan said,
May 15, 2007 @ 4:31 am
Wow. What a chart. If stochastics and candlesticks have any validity (and I think they do), this bruised kitten has just gotta bounce….but we will see. Thanks Will.
Fan said,
May 16, 2007 @ 5:05 am
Still hammering away at that bottom. If volume is drying up on the selling, this one looks better and better.
Will said,
May 16, 2007 @ 10:11 pm
It’s such a tease. Volume picked up this afternoon and got another hammer with lower high, but a positive close.
Fan said,
May 17, 2007 @ 4:57 am
How about ALK for oversold fodder?
Will said,
May 17, 2007 @ 12:40 pm
Maybe for a daytrade or 2-day swing, but I’d be more inclined to look to short a pullback instead. Can’t really say why, other than I’d like to see a bottom with a capital “B” on it. Hell, with the overall market where it is, I’m trading less and less.
LP said,
May 18, 2007 @ 9:42 pm
Damn…Will what a terrible pick! Don’t you wish you could be a hundred percent right. Man I remember having this conversation with you, where I said your P&L is more important than your Win/Loss. While you concurred, you also said it was psychologically taxing. Man the perfectionist in me is killing me, Anyway, I reviewed my saved AGP chart prior to my comment and I had support on the monthlies at 23.83. The low of this month was 23.98. However, I am concerned about the 5/17/2007 bar. It occurred on high down volume and finished near the lows. I would have felt better if it finished on low down volume and near the bottom third of the bar. This stock needs to pull back and retest before I consider a longer term options play. Damn, this one had some potential for at least a little pullback.
Will said,
May 19, 2007 @ 5:53 pm
LP - Hmmm, I’ve not seen an entry on it, so I think it’s still a great pick for a quick countertrend swing. An entry on that hammer would have been a break of its high (didn’t happen), and all we’ve gotten since then have been lower highs. Any bottoming candle on increased volume… I’ll still trade it in a heartbeat on a break of the candle’s high.
As for calling a bottom, I hope I didn’t imply that. “We may have a trade” to me means, at the least, enter on the break of the previous high (or low, as the case may be). Conversely, by the same evidence (no higher highs yet), I haven’t seen a reason for someone who was short to be stopped out thus far, unless they took profits on a Fib extension.
‘Course, it’s Saturday night and I just got home from a job where I’ve had to work nights and weekends for nearly 15 years, just to give the money I make to other people, and I’ve never come close to breaking out of that cycle with the capital gains from my brilliant stock trades, so I wouldn’t argue with anyone who told me my logic is faulty. It is not only possible, but entirely likely, that I am totally full of shit.
LP said,
May 20, 2007 @ 7:23 pm
Naw…I’m wasn’t implying either…I too was waiting for that break…just didn’t happen. After reading that book and studying a ton of charts, I am no longer afraid to trying to call a bottom. Mostly beacuse my option strategy has no stops. It’s all or nothing. However, I am learning that what I should do is take maybe a 1/3 to 1/2 position at the long term support areas. If it fails then it’s ok. If it works, then that will be a nice high risk reward ratio. The other 2/3 or 1/2 should be taken over that break of the hammer or some break out area.
As far as working a million hours. You do it for three reasons. As far as I am concerened you are a great role model for all the things you do with your kids. And one day Will, you are going to be so damn good at this here trading thing, I may just have to pony up the $99.99 for the newsletter.
The other day I had this mid-nubie trading crisis. I talked to a goldman prop trader buddy of mine and he told me all the things that made him successfull. I got me really down and I was about to tear up all my work and start over when another friend of mine settled me down and made me focus on using existing my existing foundation and piecing together more bits to obtain that elusive edge. That’s when I realized that there are people who are fooled by randomness and think they are doing well and there are others who are building that foundation and developing a real longer term edge. Unfortunately, building a proper foundation in this game takes a lot longer and is more frustrating than anything in life. So when I see your analysis, I say to myself that’s how I need to approach my trades. The more often I do that, then at sometime I will break through and make it big. Will, trading for pennies is not worth it and there are far too many who do it. Some have big dreams but crappy plans. Others have great dreams but are slow to develop. Unfortuantely, your dream is the slower but far more powerful type. So keep chipping away and I may just see you somewhere on traders monthly 100 or so.
Will said,
May 20, 2007 @ 8:01 pm
Thanks Lloyd. Was just meditating today on focusing more on the longer term, and not in the typical sense. I still continually find myself pursuing multiple small gains, the classic habit-error which leaves me losing, or churning at best. After so many years, time to piss or get off the pot.
I’m thinking more along the lines that we’ve discussed on the sites and in emails — the idea that folks like Taleb grind along for months taking losses, then in a few weeks of unexpected action (like the drop on Feb 27 and then the unprecedented run over the last month), they make it back plus enough money to sustain them for years.
I was thinking of a hypothetical: could you trade the same plan and take losses month after month, with the knowledge that mathematically, somewhere between 12 and 36 months you’d catch an event that would make it all worth it? I find myself saying that I can be that patient, but my trading show’s I’m not really there.
Anyway, I’m currently in a strange kind of spread with options and stock, should do pretty well with a decent move in either direction, and I’m still working on the daytrading on the side (here’s to 3-minute bars!) and watching for occasional swings like this one. Although, come to think of it, even trading a swing bounce on this stock would be going long in a downtrend, something that I supposedly swore off a couple of years ago!
Thanks for the thoughts, and we’ll just have to make a deal that whichever one of us gets a yacht first, buys the drinks!
LP said,
May 20, 2007 @ 9:11 pm
Will,
Even if I am the second to get the yatch. I will still buy the drinks. Though, I may not recover from the first round in time to get to the second round.
Also, eat like an elephant and poop like a chicken. It may be psychologically taxing but it may be well worth it.
Followup on AGP trade; 2b Top on QQQQ • dummyspots.com said,
May 22, 2007 @ 3:42 pm
[…] LP: Will, Even if I am the second to get the yatch…. […]