My First Stock Picks For November: Fcx, Clwr And Xhb
Jim Makos | Nov 02, 2012 03:04AM ET
I have begun applying my swing trading strategy with real money in November and my first 3 stock picks were Freeport-McMoRan (FCX), Clearwire Corp. (CLWR) and SPDR S&P Homebuilders (XHB) stocks. I bought those stocks during the first hour of NYSE trading and today I realized I invested in an equity fund, a mining stock and a telecommunications company that provides 4G wireless services. I wasn’t aware of that since my stock trading strategies are mostly based on stock charts’ technical analysis.
First I bought XHB shares. The Homebuilders ETF stock breakout that I noticed when I loaded the XHB chart was enough to persuade me to go long. I bought 100 XHB shares for $26.69, setting a stop loss just below Thursday’s open at $26.09. Thus, my risk for this trade is set at $0.60 per share or $60. The profit target is set a long way up in case something extraordinary happens, although I would gladly trade out at $28.15. Why there? Because that is where the 100% Fibonacci extension level is found, by taking the recent trading range between $24.50 and $26 into account. The equity fund’s stock is trending upwards since 2009, making an effort to test past resistance levels at $40 and $30.
FCX stock was trading at new 5-day highs when I decided to buy 50 FCX shares. My stop loss is set at the recent support level, risking about $1.5 per share. The profit target of this trade is set at the resistance level of the trading range for a potential profit of $3 per share. Freeport-McMoRan Copper & Gold mining stock has traded at $64 in 2007 and at about $5 a decade ago!
Finally, CLWR stock had been already in my watch list since the surge in October. It was a matter of time when I would enter long. I included CLWR in my stock picks when it found support twice at $1.80 and also printed new 5-day highs. Clearwire stock hit an all-time low in late July at $1.00 but 4 years ago traders would buy CLWR stock for as high as $35! I’m surely buying cheap here, but I’m not going to hold my CLWR shares for more than 2 weeks. If the stock retests the resistance level at $3.00, I will make one dollar for each of my 150 CLWR shares. Making money in online stock trading does not necessarily mean to buy a stock that is going to go up 1,000%. A 50% gain would be more than enough in this trade!
Disclosure: I’m long XHB, FCX and CLWR.
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