International Paper (IP) is another stock which I am about to add to my portfolio. Today it broke from consolidation. Tomorrow I will review the stock in more detail and based on the trading results (if the price will continue up) I will buy this stock.

When I was looking at [tag]Citigroup[/tag] (C) as a potential [tag]buy[/tag], it was in the time when the [tag]price[/tag] was [tag]up-trending[/tag], creating new high highs and high lows and I considered this purchase a pure [tag]gambling[/tag]. I knew it and a was buying it with it in my mind. A pure [tag]speculation[/tag].

However, when I was buying (see the magenta arrow in the [tag]chart[/tag]), the [tag]stock[/tag] stopped creating the new high highs and high lows. I do not like what I can see on the chart. The stock is [tag]down-trending[/tag] or being in [tag]consolidation[/tag]. It has no [tag]momentum[/tag], which it had a few weeks ago.

I decided to drop this stock, but have it in my [tag]Watch list[/tag].

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New stock picks this week:

None

Existing & new holdings:

Contribution this week: $0

Starting account value = $2,221.04

Account value = $2,254.50 (without margin)

Buying power = $3,770.78

[tag]Portfolio Gain/loss[/tag] this week = 1.51%

[tag]Portfolio[/tag] Gain/Loss for JUNE 2009 = 1.51%

Portfolio Gain/loss for 2009 = 2.02%

[tag]Annual Return[/tag] (CAGR): -14.59%

Are you interested in Reverse Scale Strategy and see how it works when implemented to even a small account?

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Today I decided to buy Synaptics Inc (SYNA). I bought 26 shares @ 36.89 and set my stop loss @ 31.94. Total risk per trade will be 13.42% which is 3% of the entire portfolio value. The stock is trending up, creating new high highs and new high lows.

New stock picks this week:

None

Existing & new holdings:

Contribution this week: $0

Starting account value = $2,165.77

Account value = $2,221.04 (without margin)

Buying power = $4,436.93

[tag]Portfolio Gain/loss[/tag] this week = 2.55%

[tag]Portfolio[/tag] Gain/Loss for MAY 2009 = 0.97%

Portfolio Gain/loss since inception = -15.86%

[tag]Annual Return[/tag] (CAGR): -15.86%

Are you interested in Reverse Scale Strategy and see how it works when implemented to even a small account?

Stay updated with Hello Suckers

No new stock picks this week:

Existing & new holdings:

Contribution this week: $0

Starting account value = $2,174.38

Account value = $2,165.77 (without margin)

Buying power = $4,396.43

[tag]Portfolio Gain/loss[/tag] this week = -0.40%

[tag]Portfolio[/tag] Gain/Loss for MAY 2009 = -1.55%

Portfolio Gain/loss since inception = -17.95%

[tag]Annual Return[/tag] (CAGR): -17.95%

Are you interested in Reverse Scale Strategy and see how it works when implemented to even a small account?

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[tag]Synaptics Inc[/tag] ([tag]SYNA[/tag]) is another candidate for a [tag]trade[/tag], which I added to my [tag]watch list[/tag] today. Here are my reasons:

1. The [tag]stock[/tag] is [tag]up-trending[/tag]. However, I have some comments to this item, see below the [tag]chart[/tag].
2. Strong [tag]fundamental data[/tag] (12 mo [tag]Relative strength[/tag] 96%, [tag]EPS[/tag] 44%, [tag]EPS surprise[/tag] +30%, etc)
3. Analysts mean recommendation is “[tag]strong buy[/tag]”
4. [tag]Short interest indicator[/tag] shows that more than 55% of [tag]investors[/tag] out there are in [tag]short positions[/tag]. If the stock continues growing, they will need to close their positions by buying the stock back, which may push the [tag]price[/tag] even higher.
5. All ratios such as [tag]P/E[/tag], [tag]P/S[/tag] etc are significantly above [tag]ratio[/tag]s of SYNA‘s peers and the [tag]industry[/tag]. This is what I want to see. (Note that [tag]value investors[/tag] may look at exact opposite results)

However, the stock is not for buy yet. Let’s take a look at its chart to see why I think I need to wait:

The stock started trending on around March 23th, 2009, see the green vertical line at the chart. The price rose up significantly soon after in correlation with its [tag]oscillator[/tag]. However, then the oscillator dropped down while the price was rising to new highs. This could be indication that this [tag]trend[/tag] won’t last long. Then the price created its new high point, see first green dot on the price line, while the oscillator created its low, see first red dot on the oscillator field. Soon after the stock price reversed and dropped down to its [tag]50 day MA[/tag], see the second green dot on price line. The [tag]StochRSI oscillator[/tag] did the exact same movement this time. Today the stock created new higher high point (third dot on price line) as well as the oscillator. However I do not have the new high low formed on the price line chart yet (waiting for fourth green dot on lower side, closer to the blue trend line). You may ask why I do not consider the second green dot on the price line chart as confirmation of the trend, because of this point is higher than the low created soon after the [tag]divergence[/tag] on [tag]weekly chart[/tag] (the vertical green line) which formed between March 26th – 31st. I would consider it, if there wasn’t a divergence on the [tag]daily chart[/tag] soon after, when the oscillator was down-trending while the price was growing. This is why I do not count this low into a “[tag]trend confirmation equation[/tag]”. If you were an [tag]aggressive investor[/tag], you could buy this stock at the first cross over (when the blue line crossed above the red one) on March 30, 2009, ignoring the divergence on the daily chart, but since then it would be very difficult to set your [tag]exit price[/tag]. The first dip of the price could not be a dip, but a [tag]trend reverse[/tag] and you would lose [tag]money[/tag] on this trade.

I am going to wait, what this stock will do next couple days or weeks. If the price continues higher and then dips again, but the low point will still be higher than the previous low (the second green dot on the price line), the next day after the price reverses I would buy a small position of this stock.

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