Oct 222014

LL (Lumber Liquidators) was a recent Short Trade idea that hit the second target for a 38% gain back in July. I had discussed the likelihood of extending the final target to T3, which was listed as the potential final target on the previously posted charts. However, LL hit the second target before I had a chance to make that official and so I had to go ahead and consider the trade completed when T2 was hit (as it was too late to make T3 the final target). Fast-forward to today & LL has finally reached that T3 level, which is the level where the R/R no longer warrants remaining short (for those that held) as the odds for a reversal are quite elevated at this time. Final targets are set at the level where the R/R no longer warrants holding the position & more often than not, a substantial & often lasting reversal in the stock is expected.

As the updated daily chart (second chart) below shows, LL is trading at the bottom of what appears to be a bullish falling wedge pattern complete with positive divergence forming on both the MACD & RSI, all while trading just above that key horizontal support level (the previous third target). With the current near-term & intermediate-term trends still bearish for now, I’m still considering long trades as counter-trend trades until/unless the charts say otherwise. I also have some concerns about LL as there is a thin-zone just below the T3 support level which runs down to about the 34.25-34.10 level. If LL were to make a solid break below T3 (about the 48.90 level), there’s a good chance that the stock will back-fill that thin zone. Counter-trade or not, I’m looking for some new long trade ideas for both hedging exposure (for those positioned net short) as well as for those traders position net long, with a longer-term bullish outlook.

With that being said, LL offers an objective long entry here around current levels (51.40ish). This holds especially true for those with a longer-term bullish outlook who believe that this most recent sell0ff is over and the markets are headed much higher. My first target would be the former T2 level, with the actually target set just below the bottom of the July 9th gap at 69.65 (target = 69.55) with a suggest stop on a daily close or solid move below 48.60.

click here to view the live, annotated daily chart of LL

Jul 092014
LL Final Target Hit July 9th

LL Final Target Hit July 9th

The LL (Lumber Liquidators) short trade has hit the final target, T2 at 71.72, for a 38% from the original entry. LL was first mentioned as an aggressive entry as it was just breaking down below its 2-year primary uptrend line on the morning of November 22nd (trading around 114 at the time). I also listed a second add-on or more conservative entry on a break below the 109 support level, which the stock also went on to trigger later that same day, providing a 34.2% gain based solely on that entry level (and about 36%, if taken in tw0 equal lots at both entry points). The possibility of adding a third target target level around the 49 area was previously discussed but as I did not make it official before this 2nd & current final target was hit, I will consider T2 the final target and LL will now be moved to the Completed Trades category where all associated posts on this trade will be archived for future reference.

LL is one of many trade ideas, both long & short, that have remained in the Active Trades categories for many months now. Unlike LL, which never exceeded any suggested or reasonable stop (always trading below the original entry point since the inception of the trade), there are quite a few old trade ideas that have either exceeded their previously suggested stop criteria or any reasonable stop criteria, if none suggested. I do plan to clean up the Active Trades category this week by removing any stopped out trade or those that no longer look very attractive & I will also continue to scan for any new trade ideas offering the most attractive risk/return profiles. As always, if you have any questions or comments with any of the trade ideas or market analysis shared on RSOTC, please don’t hesitate to contact me.

Dec 102013

LL daily 12-10-13The LL (Lumber Liquidators Holdings) short trade has hit the first target of 91.25 for a gain of 18.2%.  T2 at 71.72 remains my current final & preferred target although this trade may still be extended to the 49 area, should the trend indicators on the broad market start to roll over soon.  Updated daily chart shown.  Click here to view the live, annotated chart.

Admin note:  A feature will soon be added to Right Side of the Chart allowing those subscribed to receive email notifications of new posts to select which specific categories they wish to receive email notifications on.  For example, long-term swing traders and investors might choose to only receive notifications when a new Long-term Trade setup is posted while opting out of receiving notifications of completed trades, market analysis, etc…  This new feature is expected to be rolled out within the next week.

Nov 242013

LL daily 2This is a static daily chart of the LL (Lumber Liquidators Holdings) short trade idea mentioned on Friday morning as well as a link to the live, annotated chart.  Suggested profit targets are T1 (first target) at 91.25 and T2 (second target) at 71.72 with a potential, but not current, third target around the 49.00 area.  As various entry criteria were suggested for this trade, stops should be set according to one’s unique entry price(s).  LL remained below the primary uptrend line/breakdown level following the post on Friday morning, trading around 114 at the time of the post and then started to fall sharply just before noon EST on the news that Whitney Tilson of T2 Partners was short the stock (a well timed and probably not purely coincidental press release as the stock had just broken major support with strong bearish divergences in place on the chart).

As usual, the odds for a reaction (bounce or consolidation) off the first tag of T1 is likely so at this point, anyone who missed an objective entry on Friday might wait for either a bounce towards at least half-way back to the trendline before adding to or initiating a short position OR wait until the stock makes a solid break below the T1 level, preferably after a decent bounce or consolidation off that level.  Click this thumbnail image to view the static chart as of Friday’s close or click here to view the live chart of Lumber Liquidators.

Nov 222013

I will be away from my desk for most of the day and might post some charts or commentary later today, should we get any significant technical developments in the market or with an of the active trade ideas.  We did have a couple of trade ideas hit profit targets recently, which I will post updated charts on asap.  The ZNGA long trade hit the first profit target of 4.43 yesterday & the HSOL short trade hit the first target of 3.40 shortly after the update on that trade (with the target level added) was posted.   From a quick glance at my watchlist, I can see that the SPLK short trade has gapped up, exceeding the suggested stop.  SPLK was recently added as a short setup or active trade with an aggressive entry on Nov 8th or to wait for a break below the 59.50 support level, which never happened as the stock found support just above that level yesterday and followed up with the large gap today.  Anyone who took the aggressive entry & still holds a short position might consider a stop above the current HOD at this point, which is 74.45, trailing your stop lower should the stock fail to build on today’s gains.

There may be a couple of other trade ideas that have hit a profit target or exceeded their suggested stop(s) which will be updated later today or over the weekend.  There are a few new setups that might be added once the current trade ideas are updated.  I did receive a price alert on LL as a possible short entry as the stock has broken below the 2-year primary uptrend line generated off the Dec 19th lows (use a log-scale chart setting).  Exact targets & stops TBD but the first target would be just above the 90.90 area with a second target around 71.70ish.  Of course the trend is still very solidly bullish with a strong bid beneath the market so although we’ve had many successful short trades recently, shorts remain counter-trend trades at this time and as such, sell signals such as intraday breakdowns below an uptrend line or bearish price pattern are prone to an above-average rate of failure (false sell signals).  Therefore, waiting for a daily close below support, especially on a swing trade with fairly large profit potential such as LL, would be a prudent strategy for all but aggressive, nimble traders.  LL also has decent horizontal support at 109.  As such, one might wait for a break below that level before shorting or bringing the trade to a full position.  Chart to follow later.

Aug 072013

I spent some time pouring over the charts last night looking for trade ideas.  In doing so, I came up with numerous candidates, both long and short.  Some of these trade ideas are already listed as Active Trades on the site and/or Trade Setups while many are not.

I’m going to start with the short trades here & plan to follow up with some of the Long Trade Ideas soon.  Some of these trades are currently offering objective short entries at current levels while others are still setting up in bearish chart patterns, awaiting a formal breakdown or sell trigger.  I will post charts on as many of these as time & resources on the site permit.  However, web traffic to the site continue to grow, the capacity of the web-hosting resources are being stretched and we will soon be forced to migrate the site to a more powerful or dedicated web-hosting server.  Until then, I will have to limit the number of posts send via email notification to remain under the current email throttling limit of 750/hour. You may have also noticed a few instances where the site was down over the last few months, the result of overload on the server.  Both issues will be resolved soon via migrating the site to a more powerful server.

Here are some (but not all) of the short trade ideas that are either offering an objective entry (denoted with an asterisk) or are setting up in a bearish pattern, awaiting an objective short entry such as a breakdown or backtest of recently broken support:


As there are quite a few charts that I plan to update throughout the day, the new post email notification feature may be suppressed on some of the trade setups posted today.   If so, you will receive a brief summary at the end of the day listing all new charts that were posted.  Thank you for your patience & understanding in this matter.