How to actively trade around a core position | On watch: $FLWS, $DKL, $PLTR, $DHI, $LOVE

Trading

Let’s look back at a few stocks from last week and see how they are trading now.

And off course there are some new charts that look appealing to me that I like to share with you.

At the end of this post I included a chart from Lovesac Company that I’ve been trading more actively to show you how I trade around a core position. And how you quickly can compound your account like that.

 

1-800-Flowers.com or FLWS did exaclty what I was looking for last week.

On Tuesday it broke the pivot point at 29.94. And I bought a starter position in the end of the day.

It moved up two days after the breakout happened but on Friday it gapped down almost to the previous resistance level.

It managed to trade back up during the day and closed at a strong price which still shows a nice pattern to me.

So no reason to sell for me yet and am up just over 5% as of the close on Friday.

Will be watching the price action closely the coming days to see if my profit cushion will be good enough for the earnings report coming out on Thursday before the market open.

 

Delek Logistics Partners or DKL was on my watchlist two weeks ago when it just broke out of the 32.94 pivot point on strong volume.

I bought it then and am still holding my position in it as the chart still looks good. Nothing to indicate an upcoming sell signal to me.

Currently just over 15% profit and my stop moved up to breakeven price at 32.94.

Another possible buy point was when it made a new high at 34.91 on the 12th. Only three days after the initial breakout.

As you can see it traded sideways around that price for a couple of days and even retested the 32.94 pivot price as new support level.

Which would have given you another buy opportunity as it rebounded from that price.

 

A stock that is setting up a great chart pattern is PLTR. Last Friday it already ran up 25% in a single day on very strong volume.

Of course it would have been a good day if you owned it, but for me there was no earlier buy sign yet.

The current base it has formed looks strong with a relatively short trading history.

But you can see that in October it already had a breakout of an IPO base which resulted in an almost 200% gain in about an month.

Showing that PLTR has super performance potential.

Depening on the opening this week, and how PLTR will behave in the first hour of trading I’ll be looking to buy when it breaks the previous high at 33.60.

 

DR Horton Inc or DHI is trading just below a 78.35 pivot point entry from a triple bottom base pattern.

DHI reports earnings on Tuesday 26th before the market open.

I expect it to be strong since the homebuilder industry is performing great in this pandemic where everybody is locked down at home. People invest more in their own homes.

But I don’t trade of expectations to be true or not, I trade the price moves that happen.

So for me it will not be a buy before that, even if Monday shows incredible strength I’ll wait for the earnings to come out.

Off course it is a catalyst that can help push it over it’s pivot point and trade higher after this 5 month consolidatiom with mostly sideways action.

 

How to actively trade around a core position

Let’s have a look at my trades inĀ from the last weeks.

I bought my initial position in Lovesac on December 9th when it broke out of a double bottom base at 36.86.

On December 21st I took 21% profit at 44.61 on half of my position to lock in some good gains.

Then on January 4th the stock dipped and closed just above the 21-EMA which was a strong sign.

I waited for the next open to see how it would handle that and it opened right at the 21-EMA and soon traded higher. I bought back into a full position at 40.39.

And when I buy back in this case I often use the same amount of my initial position including the profit I already took.

Let the compounding do the work.

So say I bought 136 share for about $5.000 initially, and took 21% profit on half my position. Which is just over $500 profit on 68 shares.

So my next buy will be the initial amount (2.500) plus the profit (500) so a total of $3.000.

I added back to full position at 40.39, which is 75 shares of LOVE for $3.000.

On January 11th at 50.91 I took 25% profit since my latest buy on half of my position again.

For the $3.000 invested with my second buy that profit was just under $800.

In a few days, on January 13 LOVE dipped again and neared the 21-EMA from which it rebounded once again. For me a buy signal to buy back into a full position at 44.91.

At this time I’m using the $3.000 plus the latest $800 additional profit, for a total purchase of $3.800.

This gave me a 85 share position in LOVE. Next to my remaining half position from my initial entry.

And last Friday I took 24% profit again at 55.58 at that latest buy. Which gave me another $900 profit.

So I am currently still holding half of my initial position at a buy price of 36.86. Which is currently still in 52% (or $1.300) profit.

Next to that I made an additional $2.200 with three near-perfect trades around that core position.

 

Let me know what you are watching this week? Or what stocks are you trading currently?

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