DD: Position Trade

DoubleDragon Properties Corp.

DD's immediate support at 20 remains intact and strong. This support also falls around the 38.2% retracement which is one of the significant Fibonacci retracement levels.

*Immediate resistance at 22.

Trading Plan

Position Trade:
- Buy/Accumulate around the immediate support at 20.
- Near term TP at 25 (sell half if it hits this target, profit run the rest with trailing stop starting at 23).
- Stop-loss around the 50% retracement (a few points below 18).

Short Term Play:
- Buy near 20.
- Initial TP at 22 (sell half if it hits the initial TP, profit run the rest with appropriate trailing stop).
- Stop-loss just a few points below 19.5 for a risk reward ratio of at least  1:4.

Remarks
DD remains a long term buy (growth potential base on its 2020 business plan).

Technical Analysis Introduction

Technical Analysis Introduction, Tutorials and References

Introduction to Technical Analysis
- http://www.investopedia.com/university/technical/

Chart Analysis School
- http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis

Forex Trading School 
(most topics are applicable to stocks)
- http://www.babypips.com/school

Harmonic Patterns
- http://www.harmonictrader.com/price_patterns.htm

*Updated links can be found in the "Technical Analysis" section of this blog.

ION: Range Trade Play (Range trading lesson)

Ionics, Inc.

Range trading setup on ION.

Support zone = 2~2.1
Range trading band = 2~2.3 (can adjust the 2.3 upper band when using trailing stops, doing profit run, or depending on your risk level)

Trading Plan
- Buy/Accumulate at support zone (the closer to 2 the better).
- Sell near the upper band around 2.3 (initial TP).
- Stop-loss at 1.94 (can be adjusted depending on your comfort zone for the risk/reward ratio).

Notes
- Assuming you can get it around 2 and sell at 2.3, your risk/reward ratio is around 1:5 (a probability of winning 5 times the risk).
- Assuming you got it at 2.1 and sell at 2.3, your risk/reward ratio drops to around 1:1.25 (relatively higher risk but still doable if strictly implementing the tight stop).
- Alternative profit taking method is to use a step up TPs and use trailing stop to protect gains (set initial TP > once initial TP is hit, adjust stop-loss to break-even...and move up from there in TP steps).
- Another profit taking method is to profit run the rest of the position with trailing stop after initially taking profit at first TP (use percentage points on trailing stop just below the initial TP).

Potential result
- Using 2~2.3 trading band with 1:5 risk/reward ratio, the potential gain will be around 15% with the risk of losing 3% (excluding charges).
- With 1:1.25 risk/reward ratio, potential to gain 9.5% and a risk of losing 7.6% (excluding charges).

Remarks
- The trading plan above is just to demonstrate a logical approach to range trading and avoiding impulsive buying.
- Impulsive buying usually comes with indecisiveness when to take profit resulting in a potential gain that eventually turn into a loss (gain na sana naging bato pa).
- Stop-loss is there to minimize your risk (losses) and survive to trade another day. Avoiding a scenario of a short term trader that becomes a long term investor (dahil naipit).
- Higher risk/reward ratio insures that you will potentially remain profitable over the long run despite some bad trades hitting your stops.

Additional Notes
- Never let a winner turn into a loser.
- Risk can be predetermined but reward is unpredictable (never trade without a stop-loss).

GLO: Approaching Major Support

Globe Telecom, Inc.

GLO is again approaching its major support at 1600 after the recent Double Top breakdown.

Trading Plan
- Test buy or accumulate position near support at 1600 (position trade).
- Stop-loss should be on confirmed breakdown from major support.

MAXS: Potentially Bottoming Out

Max's Group, Inc.

MAX is potentially bottoming out already at support area (see bottoming out pattern on the chart). It's also potentially forming a bullish Double Bottom pattern.

*Support zone: 19.6~20
*Immediate resistance: The downtrend resistance line, next is around 24.
*RSI at oversold territory.

Trading Plan
- Test buy or build position at support area.
- Short term TP at around 24 or take profit/cut position if it fails to break that downtrend resistance line.
- Stop-loss just below the support zone.