Need Your Help

[novie08]

Biggest winner this year is EDN +28.4%...small position. Should I sell (fold), add, or hold?

[maxi]

ummmm trailing stop.....

[senescent]

This is the kind of trade that I used to make a lot of money in - although I used to do it with country mutual funds rather than single stocks. You have a solid value play in a country whose currency is on the skids. My strategy would always be to jump in with both feet after a currency slide on the theory that the underlying companies still had solid value. It always worked well. Since this is only a single stock (and Kirchner might suddenly think she is Chavez) I wouldn't go in whole hog - but I might double or triple my position and hang tough if it slid against me waiting for a gain of 60% to 100%. Remember to be greedy when others are fearful.

finance.yahoo.com/echarts?s=USDARS%3DX+Interactive#symbol=;range=5y;compare=edn;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=;

[huh]

Great suggestions Maxi and Senescent. Extremely low valuation even after a big move up. Always a tough decision.

Before looking at a chart, I was going to simply suggest setting a low stop or trailing stop. But there is a potential topping pattern here. So I can only tell you what I would do in this case. So take it FWIW.

In the chart below you can see a potential H&S. And the recent high hit exactly where you'd expect with this pattern, on the shoulder test line.



So I'd simply use a mental stop under the 76.4 retracement of the recent bounce (green FIBs). You can see this in the next chart showing a closer view. I say mental stop because "the game" this year has been to let pps quickly fall under this FIB, then turn and rally. Sometimes it will even close under it only to rally the next day (like the SPX has been doing again and again).



If you wanted a hard stop to take all emotion out, I'd use something like 5.84. That's under the 76.4 of this FIB ($6.00), but also more than 1% below the 38.2 FIB of the previous move ($5.91/purple FIBs). And since it already did a 50% retrace of the previous move, it shouldn't fall under that already regained 38.2 FIB now. If it does, it will likely drop to the neckline. And you'd lock in about a 19% gain.

$5.91-$6.00 should be strong support now if this is to continue up & break the potential H&S. So unless the rally is losing strength, your stop should be fine.

(personally I like the mental stop option because this could do something like a quick drop into the 5.70's, then bounce back to ~6.40 to form a smaller H&S, all of which would be the RS of the larger H&S. A little more risky but good potential to take a bigger gain even if it does look like it will break down. It's not always the correct move to sell when the final FIB breaks, but instead use it as a signal that momentum has now broke and to sell the next bounce. $5.70 would be the worst case stop in this scenario - still ~16% gain to you & gives this plenty of room the breathe).

If it instead rises above that shoulder test line (upper white line), you can then move stops up using the 76.4 FIB of each upswing.

JMHO & BOL

[huh]

After reading all that, wouldn't you hate to be in my head?

In summary, two options to protect gains:

Option 1:
Hard stop $5.84

Option 2:
Trigger order: If last pps = 5.77 or less, then GTC sell @ 6.33.
If no bounce, manually sell it ~5.70.

[novie08]

Thanks everyone! My buy pt. was 4.89, but I only have 500 shares. The 28+% is after trading fees...I bought on 10/30. So senescent's sell would be at least 7.82. As I type, the price is 6.33 huh!
I hate stops too b/c we all know they run the stops. But trailing stop is much better as Maxi points out. to all of you! (There's no emoticon for hugs).

[huh]

Of course there is always the option to take the gain now and wait to see if it breaks over that shoulder test line ~6.85. Although you could miss some upside, it is the best risk/reward here.

Wish I had looked at this before. That $6.85/6.86 was the ST sell point.

[huh]

6.50 is the 76.4 FIB resistance for the recent down move. Hold over that and can move stops even higher (also the sell point for a day trader, then buyback if breaks over).

[huh]

Feb 28, 2014 11:22:26 GMT -5 huh said:

6.50 is the 76.4 FIB resistance for the recent down move. Hold over that and can move stops even higher (also the sell point for a day trader, then buyback if breaks over).

...and breaking higher. Ignore everything I said and go with Maxi's suggestion! I needlessly over complicate things! lol
(I'd still be selling in the 6.69-6.85 area if it were me though, JIC. Can always buy it back)

[jacksrbtr]

Its been in bullish consolidation since Feb 14th and its 20 & 50MAs are crossing in a bullish manner on the daily.

I'd keep it with a trailing stop

Next level of resistance is that Dec 13ths 7.65

GL

[huh]

Feb 28, 2014 14:28:21 GMT -5 jacksrbtr said:

Its been in bullish consolidation since Feb 14th and its 20 & 50MAs are crossing in a bullish manner on the daily.

I'd keep it with a trailing stop

Next level of resistance is that Dec 13ths 7.65

GL

Yeah, but so far that sell in the 6.69-6.85 range today was the right call. (HOD 6.75)

[novie08]

You're right Huh, but working on ugly, ugly taxes and just held today.

[novie08]

Should have sold huh?! Markets could be roiled for a while here.

[huh]

EDN hit the 61.8 FIB of the recent down move with the HOD (6.42) and falling through the 50 FIB support. If it were to lose 6.30, it sets up to lose the 6.10 support as well (and that would be really, really bad).

However, if it can manage to get over that 6.42, there's one FIB final resistance of 6.50. Above that and back to the highs and possibly higher.

Resistance and Support

[novie08]

You are brilliant(!) and thanks so much for following up. Sorry I haven't been around, just got a lot going on...It's sitting right at 6.50 today at close of course. Still +23% ytd. Hopefully we clear that tomorrow, but one never knows on opex Friday. Those MMs are nasty, hehe.
Just glad I saw this. On my way out again in a few.

[huh]

Mar 13, 2014 15:46:59 GMT -5 novie08 said:

You are brilliant(!) and thanks so much for following up. Sorry I haven't been around, just got a lot going on...It's sitting right at 6.50 today at close of course. Still +23% ytd. Hopefully we clear that tomorrow, but one never knows on opex Friday. Those MMs are nasty, hehe.
Just glad I saw this. On my way out again in a few.

I hope it breaks out for you. Upside resistances above here are 6.62 and 6.82. But if it holds above here, it should run for ~9.00.

And if it doesn't, at least you have some pretty well defined supports to use as stops now (6.42, 6.35, 6.30). But the ultimate one now is 6.10. Below that and it could create a top targeting the 2.20's IMO. But hopefully that never comes up.

[novie08]

So far so good but the markets look like they're turning.

[bc]

I'm sure you will do well nancy. Either way, consolation in that your avatar definitely would crush my avatar.

GL to all and happy spring time!

[maxi]

EDN is not a stock you trade for small moves. Here are the LONG term weekly and monthly charts. EDN's future depends on Argentina's use of electricity and Repsol's investment in them and Argentina's energy use. And of course Argentine's gov't and their decisions for their companies. I recently learned that Argentina has a yearly council meeting in April to decide what utilities ( and maybe all their companies) are allowed to charge and whether or not they are allowed to pay investors dividends.

"Dividends are proposed or set during the AGM (Argentine General Meeting) which is usually in April. This is apparently a national economic forum where economic policies are aligned among the country's financial & government communities."

[novie08]

Wow! lots to think about there Maxi...sounds like a big roll 'o the dice. That's the trouble with other international markets, we don't have any clue what the govt's. may do.