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Showing posts from September, 2018

Tilray $TLRY and the Risk of the Penny and Cannabis Stocks

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Why I don't trade penny stocks.
In my watchlist, I only include Big-Mid-Small Caps companies, only those with MarketCap >500M. Must also have a good daily volume of transactions, medium-high volatility (30-80%), with an accessible float (i.e shares in the hands of the public > 200M shares), and also be quite popular, those which make the news of the day. So, If you are looking for the also popular penny stocks, this blog is NOT your place. There are many investor webs or blogs that launch or "analyze" 5 to 10 pennies each day, of which only 1, with luck, get gainer. (And sometimes you have to pay for that info as a great offer!) Of course, having very high risk-reward, one of the characteristics of the pennies are its usually strong gains (or strong losses). So, it is very tempting to buy penny stocks and wait for the rise, but if one has rigid risk management can and should avoid them. However, every trader is free to decide: go ahead if you like bets and good lu…

Stocks to Watch: Gold ETF $GLD

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SPDR Gold ETF GLD, $113.77.

Background:

As I have usually written in this blog, I do not trade with futures, but I follow them daily, because they are the basis of all my analysis. For that reason, I think that the best asset to follow in for stock trading when there are FOMC meetings, like this week, is the Gold /GC. Usually designated as the safe haven asset, together with the Japanese Yen, this week has a decisive test in Wall Street that will determine its behavior in the rest of the year.


Fundamentals:

This Wednesday 26th will be known the FOMC's decision and mainly its guidance and forecast, very important to know the behavior of the dollar in the next Q4, and therefore its antagonist, the gold. A Rate Hike, as expected by almost all analysts, would complicate the price of metal. If you add to this a probably hawkish outlook of the FED, the recovering in its price, which seems to be beginning, would become very unlikely, since it is known that historically gold suffers with…

Cycles of the Economy and Sector Rotation

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The Sectors.
Usually mentioned in my blog, diversifying by industrial sectors is one of the most intelligent ways to manage a portfolio of investments in shares. The Global Industry Classification Standard (GICS) is the one that defined the 10 existing sectors and groups, which today are 11 since a couple of years ago, Real Estate was added. Standard & Poor, creators of the main stock market index of Wall Street SPX, manages the most popular funds in the world based on industries, which appear in the following table.




- The "offensive" sectors (bullish, aggressive) are Financial XLF, Technology XLK, Materials XLB, Industrials XLI, Discretionary XLY.
- The "defensive" sectors (bearish, safe) are Staples XLP, HealthCare XLV, Utilities XLU.
- I consider "neutral" sectors the Energy XLE and Materials XLB. Some economists think differently, and consider them slightly offensive.



Relation between economy and sectors: the Sector Rotation

The most useful thing…

Stocks to Watch: Natural Beverage $FIZZ, Advanced Micro Devices $AMD

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1. Natural Beverage Corp. FIZZ, $116.92.
Background:

About 4 or 5 years ago there was a fever due to the stocks of beverages. Stories of companies that started small and were evolving due to the quality of their products became viral, as was the popular Green Mountain Coffee Rooster (now disappeared when it was acquired by JAB Holding in 2015 for $ 13.9B in cash), Sodastream SODA (israeli group, which manufactures soft drink machines at home, recently acquired by Pepsi PEP at $ 3.2B) or Monster Beverage MNST (with its energy drinks, still maintains its growth after its merger with Coca Cola KO).

Today sounds pretty good on Wall Street, the case of National Beverage, which trades on the NYSE under the suggestive FIZZ symbol. Even a Mid Cap company ($5.4B of Market Cap), its products have a lot of acceptance in the US: energy and gaseous drinks and juices, among them the popular LaCroix (its flagship product) and Shasta. After a great 2017 came the natural correction, to again be close…

Analysis of Emerging Markets: in the beginning of a crisis?

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Are we already in a crisis of emerging markets? The slow but sure rise in the dollar plays a decisive role in this idea. Being reinforced in recent months has been generating various collateral effects in emerging countries. Let's see it in parts.

As a preamble, this graph shows us a comparison of the different investment instruments and commodities since 2015. The emerging markets are followed by the ETF EEM, in gray.



As you can see, this situation of falling in the emerging markets is not new (20% drop from it last peak in January). Recently it happened in 2015 when a greater concern about the market disturbances promoted by China gave way to a comforting restoration of capital flows, higher prices of assets and a much more favorable operating environment for emerging countries since 2016.

Since that year, EEM index (and general all the world stock exchanges) walked parallel with the US stocks represented by SPX, the SP500 index. It is from March 2018, when comes the first news…

An Introduction to Bitcoins and Cryptocurrencies

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One of the most requested assets today in investment portfolios and by retail traders are cryptocurrencies, such as Bitcoin, Litecoin or Ethereum, digital currencies that use blockchains (which act as a notary public) for the storage of the data of your financial transactions. I include myself among the many traders who underestimated this digital currency because he did not understand its concept and distrusted that there is no Central Bank behind it, apart from its dark origins and its exposure to cyber-attacks. Today they are the "fashion" currency: everyone wants to have bitcoins because of the accelerated price increase they have had since last year.

But, why should the bitcoin interest us, and how can it affect my future? I think that every trader, if he has an interest in the subject, should 'lose' 30 minutes of his life in watching the following video 'The Blockchain and Us' by Manuel Stagars, very illustrative on the subject. It does not deal with t…

The Spirit of this Blog

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About Me
The renowned trader Alexander Elder wrote that Greed and Fear are the main human feelings that move the markets and so, the stock trading. This blog presents a look at the main events in Wall Street at a glance, through posts, thinkorswim charts and a daily timeline below Latest Tweets. Also I share my favorite stocks through my "Watchlist Update" and useful "Trader Notes", articles with tips for your daily trading. All the material in my blog is original, from my own analysis, perception, and interpretation of the markets.

I'm Luis Huasasquiche Bravo-Mejía "BravoTrader", a civil engineer here in Lima Perú, math and tech lover, minimalist, with studies in Finance, and twelve years trading the markets. My approach would be defined as a trader with a focus on both fundamental and technical analysis, plus an outlook of market sentiment and investors psychology, always with a risk management emphasis. 
Why?
I am not here to sell you trading cour…