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Successful Swing Trade: + 22.76%

February 6, 2009 Equity Trading 1 Comment

Yesterday morning, while going through my watch list, I found UYG trading below $3.00 a share. Granted, the financial sector deserved to be beaten down but not this much, especially since the U.S. government made it clear they were near a plan to save these institutions, and were not looking to nationalize banks.

Anyhow, looking at the technical indicators I performed a quick analysis. Short-term, the chart looked pretty neutral, with a faint of bullishness. After gauging the risk:reward ratio, I took a long position in UYG with a limit order for some shares at $2.90; it was trading in the $2.92-2.95 range. My plan was to exit around $3.50 for a 20% return, or cut my losses if the stock hit $2.65 (~9%).

As I watched the price fluctuate and eventually head up for a moment, it took great discipline to not modify my order to execute at market price. Eventually, after 5 minutes or so, patience paid off. Immediately after my order was filled, the stock shot up and my position ended the day  11%.

Today, on the heels of news that the government would announce plans to fix the banking system next Monday, the market experienced a short-covering rally. Consequently, my plan was coming to fruition a lot quicker than anticipated. I thought about holding the stocks over the weekend, but I already had a plan and needed to stick with it so I placed my order and exited the position at $3.56 for a 22.76% return. Not bad, huh? =) 

Currently there is "1 comment" on this Article:

  1. Dlux says:

    Not bad at all. Way to pick the low of that move to the tick!

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