I’ve been busy this week with many things, so keeping an eye on the stock market hasn’t been easy for me. Well this afternoon I’ve had the time to see the progress for the past few days and I’m amazed at the gains that have been made this week by the major indicies.
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I told you in a recent post that I jumped out of basically everything until the markets correct themselves again. We’ve had too much of a run up and I’m skeptical. Looking back on the past few days that I missed, I noticed that there were good opportunities to make money on stocks that I sold and they went on a roller coaster ride afterward.
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The one I want to talk about is Agnico-Eagle Mines Ltd. (NYSE:AEM), a stock that was as high as $62 only five weeks ago. I made the right choice to sell off my position. After it corrected by 10% I bought a small position back. I let it just sit there not bothering to pick up more as it continued to drop. Unknown to me, I wasn’t paying attention to what the stock did this week as it dropped down to below $47.50. If I was aware of the situation, I would have back the truck up so fast to grab shares at that price. That was Monday morning and now the price per share is $55 (as of 3:45pm). A 16% gain in just three trading days.
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In all the times that I’ve traded AEM, I’ve always made money. This would have been great to profit from, but I’m not going to drive myself crazy because I didn’t get into this play. There will always be more opportunities to make money, but if you want to stay sane while trading stocks, you can’t sit there and think of the “what if’s”.
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Agnico Eagle has been trading within a range of $45 to $60 (which is a nice swing gap) this entire calendar year. When the price drops below $50 I buy quite a bit, as it goes above $55 I prepare to sell. This week was a good opportunity to do exactly that and I’m OK with the fact that I missed it.
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Try to keep that in mind as you go through your portfolio.
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Yesterday I spoke about building a position in Research In Motion (NASDAQ:RIMM). My first buy-in was at $76.25 when the price dropped. Share price opened this morning at $77.86 and within the first five minutes of trading, it was up to $78.40. Unfortunately that was as high as it would go. Minutes later it fell to $76.13, where it would continue to bounce within that range.
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Research In Motion was scheduled to release their first quarter
earnings report after the closing bell today. I was looking for some more upward motion from other
traders getting on board in expectation of RIMM beating the street.
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Shortly after the bell, RIMM released their report. RIMM earned $1.12 per share for the first quarter on revenue of $3.42 billion, compared with $482.5 million or 84 cents on revenue of $2.24 billion a year earlier. Included in the results were non-recurring items. $96.4 million relating to certain employee tax liabilities along with a gain of 175.1 million primarily as a result of the enactment of functional currency tax rules. While the analysts were only expecting $0.94 on revenue of $3.43 billion, RIMM earned $0.98 per share.
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What I didn’t expect was after the company beating expectation by $0.04, the stock dropped more than 6% in after market trading. By the time after hour trading was done, the stock moved back up to $76.06, just off by 0.5% from where it closed at 4:00pm today.
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One thing that I wish I was able to do was to buy more shares when it fell to $73 shortly after the release. In April, Rimm beat expectation by 7% and since then the stock price has moved up 55%. Today they beat it by more than 4% and it moved no where today. Many investors and traders were looking for more and the knee-jerk reaction was to sell. The more they were looking for was in RIMM’s second quarter guidance. RIMM”S range for earning in the next quarter is $0.94 to $1.03 per share on revenue of $3.45-$3.70 billion. The mean analyst estimate is for 97 cents on revenue of $3.61 billion. After the conference call, I guess people realized it wasn’t as bad as it originally sounded.
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With the information I have on this company, I believe that RIMM is still fundamentlly sound and will continue to grow. I will continue to buy into RIMM under $80, after that I will sit back and watch the gains from this great company with a fantastic product. The BlackBerry is a great smartphone with many different applications to do the things you want to do. As a matter of fact RIMM just released their latest BlackBerry model, the Tour, earlier this week.
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Jim Cramer doesn’t call this company one of the four horseman of the tech sector for nothing.
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With the economy the way it is right now along with the volatility in the stock market, If you have the ability to trade stocks on a daily basis (day trader) or even holding for a day or so, you can make some money without really trying.
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You will still have to do your homework and research on the companies that you want to invest in, but if you have a list of stocks that you’re very familiar with, playing the volatility is quite profitable.
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Yesterday I spoke about building position in the companies that you want to invest in. When the markets were at their lows, I started to do so. I actually picked up some at good prices, even though I would have like them to come down some more. I told you in the past to buy in increments, not all at once. If the price did continue to fall yesterday, I would have bought more later on.
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I bought Apple (NASDAQ:AAPL) @ $134.75, Joy Global (NASDAQ:JOYG) @ $34, Research In Motion (NASDAQ:RIMM) @ $76.25 and last, but not least, Sirius Satellite Radio (NASDAQ:SIRI) @ $0.325. I expected prices to bounce back up yesterday as well as a little bit more of a gain today. I was right only three of the four trades I did. This morning I waited for the opening to see what I was going to sell. At the opening bell, Sirius was up to $0.43 per share and after the negative news about their downgrade, I expected it to drop down below $0.40. I put in a limit sell order for $0.425 and it sold shortly afterward. A gain of 30% over night. To be honest I was planning to hold on the Sirius for the long term (until their next earnings report ), but when I was up that much, I sold it and will continue on the next dip.
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As for Apple, I was also able to sell my shares at $138, for a gain of 2.5%. I know that isn’t much to boast about, but if you think that you can’t even get that on a basic 12 month CD these days. Take into consideration that I did buy large amounts of share that help offset the fees that were charged to me. Joy Global was the last on I sold this morning. I sold it at $36.50 per share, for another gain of 7.3%.
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As for RIMM, I didn’t get the action I wanted, but that’s OK since I do expect that to run into the $100 range in the coming months. I will continue to hold on to the share and add to my position.
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You need to take advantage of the opportunities when they present themselves, so if you are able to trade on a daily basis, good luck.
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