{"id":910,"date":"2009-06-04T16:47:39","date_gmt":"2009-06-04T21:47:39","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=910"},"modified":"2023-04-06T13:02:20","modified_gmt":"2023-04-06T17:02:20","slug":"what-would-you-do","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/what-would-you-do","title":{"rendered":"What Would you Do?"},"content":{"rendered":"

Today our best morning idea was to play $VLO off the $18 secondary offering price. From the daily chart you can see that the stock had just came off about 20% in the last 2 days and figured the underwriters of the offering would help support the beaten up stock down at this level.<\/p>\n

The play was to buy at $18 for half tier, and complete the other half tier at $17.90 with a stop loss below 17.75 and target $19 to the upside. When we came out of the morning meeting<\/a> the stock appeared to be hovering above $18. I bid for the stock at the whole and never got hit. I guess 18.02 would have been the best I could have gotten on the bid the moment I sat on my chair. The stock was fluxing so I figured I would just get hit soon.<\/p>\n

The stock started to show signs of strength once it started to lift in the high single digits. I went high bid to 2 cents but actually never got hit. The stock then took off in premarket and traded as high as 18.50 right before the bell. Here I was steaming I didn’t bid a couple cents higher to begin with and I was trying to figure out how to get into the play.<\/p>\n

The stock pulled back to 18.27 and found support right on the open. So here I had a dilemma: Do I load up here 27 cents away from my level? What happens if the support drops and then quickly trades to my real level and now I am in a position of weakness? If I buy half my tier in case it does trade down to $18 where I can really load up, can I really justify buying my other half tier into strength where my risk:reward is not as favorable?<\/p>\n

Most times, if I can easily recognize a significant buyer higher than my entry, I can make the risk:reward work out for a second lot. But if along the way the stock just drifts up and I cannot find that spot to add the second lot then I find myself: 1. Buying for the sake of not having enough size in the play and then hitting it into any signs of weakness, and most often actually getting shaken out of the full position 2. Mad at myself for not having a bigger position to begin with 3. not taking my sales near my target because I didn’t make as much money as I should have.<\/p>\n

Of the three scenarios described above the one I do most often is number 1. And it has taken me quite a while to eliminate that bad habit. Today I bought my half tier at the 27 cent support, I hit it when the support dropped because the stock looked awful at that point, and when I got back in I never really got back in for my half tier. Once the 60 cent level established right on the open lifted then I added to my position but I was never fully satisfied with the size I had in the play.<\/p>\n

How would you play the scenario above? I look forward to your reading your comments.<\/p>\n

Don’t forget to follow us on Twitter!<\/a>.<\/p>\n

\"vlo_642009\"<\/p>\n

\"vlo_6_month_642009\"<\/p>\n","protected":false},"excerpt":{"rendered":"

Today our best morning idea was to play $VLO off the $18 secondary offering price. From the daily chart you can see that the stock had just came off about 20% in the last 2 days and figured the underwriters of the offering would help support the beaten up stock down at this level. The play was to buy at … Read More<\/a><\/p>\n","protected":false},"author":94,"featured_media":916,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[304,34],"class_list":["post-910","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-gilbert_mendez_gmans-blogs","tag-premarket","tag-vlo"],"yoast_head":"\nWhat Would you Do? | SMB Training<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.smbtraining.com\/blog\/what-would-you-do\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What Would you Do? | SMB Training\" \/>\n<meta property=\"og:description\" content=\"Today our best morning idea was to play $VLO off the $18 secondary offering price. 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