A Trade A Day

Time for me to take a close look at FCX again. I originally featured a FCX trade on 9/11/07. The entry price was 92.15. What a difference a month and a half can make. FCX is currently trading over 117. I took partials at the 107 target and I’ve managed to hold on to some of my original position. I was close to liquidating everything on 10/22 as price approached the 102 area. What makes the trade so successful though is my adherence to my trading rules.

At some point in the future I’ll elaborate on my exit strategy, but to give you a high level idea, I partial when my target is hit(107 in this case), and let the rest run until I am stopped out. My stop is placed at levels where I perceive there to be support. There’s some subjectivity to this approach, but it works.

FCX is flashing another buying opportunity. It seams that nothing is going to stop the market from continuing upward, so we might as well ride it until price dictates otherwise. The trade is to initiate a long when FCX breaks into new highs over 120. There’s a couple of things to keep in mind.
1. FCX has been all over the place lately, so I am keeping my stops loose.
2. I will not be initiating anything untill FCX hits 122. But the price needs to be over 120 for me to consider this a breakout.
3. Volume needs to be heavy (+100%).
4. If possible I will be looking for an intraday setup in the 122 area to reduce risk.

Let’s look at the chart:

I originally thought FCX was going to break down on 9/28, but not so. The 10/22 move had me convinced of another breakdown. It’s amazing how tempting and utterly useless it is to try to predict where a stock is headed or what the market is going to do. All I know is what the stock is doing now, when I’m going to enter and when I’m going to exit.

See you tomorrow!

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